120 million people in Pakistan without an access to mobile services


Set aside all hullabaloos of mobile communication advancement and you will get the real fact that is there are still more than 120 million people in Pakistan without an access to mobile services and most of them are living in rural areas. A latest report by the US-based professional services firm Deloitte put the onus of skewed growth on high taxes on mobile telecommunication – a fact which has been frequently repeated by cellular mobile operators in their meets with government policymakers. The report claimed that the tax reduction can extend the outreach of mobile services to un-served and underserved population of the country. “As tax on mobile services represents over 30 percent of mobile ownership costs, of which over 15 percent is from mobile-specific taxation, there is real potential to extend affordability through a consumer tax reduction,” said the report, discussing the digital inclusion and mobile sector taxation in Pakistan, issued last month. Around four main taxes are weakening the buying power of consumers. If a customer wants to have a mobile connection, s/he first has to pay Rs250 as SIM card tax. Provincial sales tax of 19.5 percent and federal excise duty of 18.5 percent are levied on various mobile services, such as calls, short message service and other data usage. Then there is 14 percent withholding tax on data usage. Notably, a consumer can claim this tax back, yet again that how many people are tax return filers is generally known. According to the finding, the withholding tax is four percent higher for mobile than for other services.

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