PESHAWAR: StormFiber, a leading internet and television service provider, has challenged in the Peshawar High Court the levy of 19.5% sales tax on internet-based cable TV services, introduced through amendments in the Khyber Pakhtunkhwa Sales Tax on Services Act, 2022, via the KP Finance Act, 2025.
The petition, filed by M/S Cyber Internet Services under Advocate Nouman Muhib Kakakhel, names the KP government through its chief secretary, the KP Revenue Authority (KPRA) via its director general, and the secretaries of law and finance as respondents. The company argues that the amendments are unconstitutional, discriminatory, and unfair.
StormFiber, operating since 1996, holds multiple licences from the Pakistan Telecommunication Authority (PTA) and Pakistan Electronic Media Regulatory Authority (Pemra), covering both Internet Protocol Television (IPTV) and traditional cable services.
The company explained that Pakistan has two types of TV services: traditional Cable TV Distribution Service (CATV) and IPTV, both regulated by Pemra. CATV transmits content via cable, while IPTV delivers content over the internet, offering on-demand and interactive features. StormFiber provides CATV under a valid Pemra licence.
Previously, CATV was subject to a 2% sales tax, while internet-based TV services were taxed at 19.5%. The KP Finance Act, 2025, amended the law to extend the 19.5% rate to telecommunication providers offering internet-based TV services, including StormFiber, while traditional cable operators with identical Pemra licences but without other telecom services were taxed only 5%.
The petition claims this creates an unfair, discriminatory tax regime, penalising technologically advanced providers offering integrated “Triple Play Services” (internet, TV, and telephony). It argues the amendment violates constitutional guarantees of equality and fairness under Articles 4, 8, 18, 25, and 77, and unlawfully shifts taxation from the nature of the service to the identity of the provider.
Advocate Kakakhel contended that such arbitrary taxation discourages innovation and modernization in the digital economy and infringes upon the freedom of trade guaranteed under Article 18 of the Constitution.
StormFiber has requested the court to declare the amendment unconstitutional and void insofar as it imposes the 19.5% sales tax on internet-based cable TV services.
