LAHORE - The bureaucracy at provincial finance department and Punjab CM secretariat is not ready to abide by the instructions of the provincial government to remove tax on mobile internet and data services despite repeated orders of Punjab Chief Minister Shahbaz Sharif and Finance Minister Dr Ayesha Ghause.
Resultantly, the leading mobile phone operator in term of subscribers’ base has passed on already a 19.5 percent GST on mobile internet to their customers whereas four operators are still waiting for notification to be issued by the PRA.
Officials in the Punjab Revenue Authority has confirmed that the PRA is collecting 19.5 percent GST and would continue this practice until any notification of the govt to abolish this duty is released. The officials, who did not want their names to be mentioned, stated that Punjab imposed 19.5 percent GST through a notification on May 28 2015. Chief minister as well as the finance minister have announced to withdraw this tax several times but no notification was issued by the government so far. “We think that GST is intact until the release of notification which will actually be initiated by the CM Secretariat and endorsed by the provincial finance ministry.”
They said that elected government of the PML-N is not interested in withdrawal of this tax, as they declare verbally to remove this tax on internet on public pressure and then ask bureaucracy to continue with this tax. Officials lamented that federal govt has also imposed 14 percent income tax on telecom sector in current year budget.
The tax officials had proposed a lucrative avenue of generating tax revenues from the telecom sector because the number of subscribers using internet are growing rapidly whereas telecom sector is well-documented, sophisticated and easy for collection of taxes compared with different sectors including automobile and property. It is pertinent to mentioned here that Chief Minister Shahbaz Sharif issued a statement to withdraw tax on mobile internet in an exclusive meeting with PRA officials on July 29 which was evident a press release issued by the concern department.
Earlier, Dr Ayesha Ghause also announced the withdrawal of the mobile internet taxes on floor of House in her budget speed on June 12. It was said the notification of the SRO issued by PRA will be withdrawn that was initially issued on May 28 on mobile internet and data service as GST at 19.5 percent exceeding speed of 2Mps or above Rs 1,500 connection including 3G and 4G service.
The verbal assurance of the provincial ministry is not enough for corporation like use but a notification is necessary to avoid deduction of GST on mobile internet, said an official of leading mobile phone company. Any order by CM Punjab without in writing could not be taken as serious because Minister of Finance also announced the same withdrawal earlier but no implementation was made, he added on the condition of anonymity.
We cannot pay huge taxes from our pocket while investing million of rupees at the same time on infrastructure. Instead we can pass on the similar tax to the customer though it will discourage customers to use the technology, he further said.
Officials of rest of four mobile operators said the government should be honest with the public and honor its commitment with its voters largely for the interest of masses and social-economic development of the province.
We hope that Provincial Government will fulfill its obligation at any cost because it realizes the benefit of mobile internet and its related development in governance, education and economy.
Pakistan is one of the two countries after Bhutan imposed tax on mobile internet which made its overall rate at the highest level compared with different countries of the world.
The country leapt to secure first position in the world for highest tax regime with 53% of the overall taxes, including 19.5% on call and voice services, 14% on withholding tax and now 19.5% on additional service which was levied by Punjab government on May 28.
Pakistan has left behind Turkey with less than 50% tax, followed by Gabon with 40% and Tanzania with 34%