LAHORE: The Internet users and service providers in Punjab have protested against the imposition of 19.5 per cent general sales tax (GST) by the provincial government on the usage of Internet services of broadband and cellular data providers.
According to the notification, tax was imposed on all kinds of Internet services in Punjab, including 3G, 4G, DSL, EVO, fibre, etc.
Criticising the move, Information Communication and Technology Think Tank (ICT3) President Sohaib Sheikh has said that one year ago Pakistani telecom industry had bought 3G/4G licenses of worth $1.2 billion, additionally paying 10 percent withholding tax on it but the provincial government did not consider their investments while putting huge tax on it.
Sohaib said that all the Cellular Mobile Operators (CMOs) are heavily investing in the roll-out of 3G/4G networks despite increase of import duties for telecom equipment from 5 to 20% by the federal government.
The Punjab government is likely to collect around Rs3 billion in taxes from the sector this year; however, corresponding negative growth on Internet uptake due to these taxes will cause the national economy an estimated loss of Rs100 to Rs200 billion in five years.
According to the PEW research, 10 percent uptake in broadband subscriptions increases national GDP by 1.5 and slowness of Internet uptake due to these taxes is only going to harm the already struggling economy of Pakistan.
After several delays – spanning many years – Pakistan auctioned 3G and 4G licenses last year and telecom operators invested $1.1 billion on spectrum auction only.
