Taxation. Cellular CEOs waiting call from Ishaq Dar office!


A high level meeting took place where Ministry of Information and Technology along with Ministry of Finance met with representatives of cellular companies. However this meeting didn’t bear any fruits. The meeting was about the taxation that has been levied by federal and provincial governments on the use of mobile phones and internet services in the country.

Another meeting is expected to happen soon with Federal Minister of Finance, Dr Ishaq Dar where the CEOs of the cellular companies will be taking part directly. This meeting is going to be on the same issue, the taxation that is being levied on the services provided by them.

It is worth mentioning here that these taxes have been a constant bone of contention between the government and the cellular companies. In fact this has led to the failure of holding another 3G/ 4G spectrum auction in the country that was expected to take place last year. But the cellular companies took a stand when they complained that the government didn’t fulfill its promises.

Cellular mobile operators have made heavy investments in purchase of 3G / 4G spectrum and subsequent roll out of broadband mobile services in the country. It has opened up a new door of affordable connectivity and as these services continue to improve and grow, internet becomes more accessible and affordable to the general public. Mobile broadband accelerates the growth of digital technology, consequently boosting overall economy of the provinces and resultant the country.

The positive impact of the advent of wireless internet is quite pronounced in the province of KPK, which has around 15-20% share of the total mobile broadband subscribers in the country. Cellular services are the most feasible means through which data services and internet usage can be extended to the remote areas. While the broadband users other than mobile broadband in Pakistan are just 3.2 Million in so many years; the mobile broadband users (3G / 4G / LTE) have already crossed the figure of 25 Million in just 18 months’ time.

Mobile Broadband proliferation can therefore vastly improve the initiatives like e-Education and e-Health for the rural areas of the KPK province which is in line with the vision of the KPK Government. Moreover the Punjab province realizing the potential of mobile broadband services has also withdrawn a similar levy w.r.t. GST on Data Services as well. If the levy on data services continue; the CMOs would shy away from deploying 3G/4G networks in the KPK province meaning by the due share of the province might therefore get shifted across to other provinces.

The cellular mobile industry would like to re-iterate the importance of mobile broadband proliferation and recommend to the KPK Government to prefer long term betterment of provincial economy over short term revenue gains. Exemption of tax on internet will not only increase digital and financial inclusion and economic growth, it will also generate higher tax revenues through increase internet usage as well as through more efficient and broad based taxation.