The Friday budget doesn’t have anything revolutionary for telecommunication industry apart from the impact of uniform General Sales Tax (GST).
Due to uniform GST the earlier GST of 19.5% on cellular services/ mobile phone calls has been reduced to 16%.
An official of the cellular company has termed it a sigh of relief for the telecom industry.
Cellular industry has long been asking for the reduction of GST and removal of activation charges on mobile phone SIMs. Budget 2012-13 has finally taken care of GST but SIM activation charges are still there which are born by cellular operator.
Government is expecting that by reducing GST on telecom services, revenue will increase in the FY 2012-13. Federal Government will distribute Rs. 44.596 billion as GST on telecom services among the provinces.
Government has also set non-tax revenue targets of Rs. 730.331 billion during FY 2012-13. Out this figure, Rs. 79 billion is expected to be received from the profits of Pakistan Telecommunication Authority (PTA).
Cellular industry still demands the removal of SIM activation tax.