ISLAMABAD  – The mobile phone subscribers across the country have slammed government’s decision to levy 2 per cent radio tax.

It is worth mentioning that Federal government had announced to deduct 2 percent from all mobile subscribers as Radio Tax to pull out Pakistan Radio (PBC) from worst economic quagmire. The measure is bound to deal a severe blow to already hard pressed Telecom industry.

It is to be noted that telecom industry in Pakistan is already facing an alarmingly high tax rate of 33.2 percent; needless to say the ratio is highest and strongly crimps the growth of telecom industry. A senior executive in tax department on the condition of anonymity told the government levies an aggregate tax of 33.20 percent, inclusive of 19.5 percent of Federal Excise Duty (FED) and 11.5 percent Withholding Tax (WHT) on one of the few star performers of the stagnating economy.

Waqar Ahmad, an engineering student said not only Pakistan Radio but there is a long list of departments and institutions in Pakistan eaten up by corruption and maladministration.

“PIA, Pakistan Steel, Pakistan Railways also cause losses worth hundreds of billions of rupees; why not subtract a few more rupees from every recharge in the name of these corporations?” he added.

Earlier, Musharraf government had added Rs 35 on every electricity bill but the measure had been severely criticised by all and sundry.

Experts fear the trend is culpable in its own right, capable of giving way to severe inflation but it would affect only those who are already under the tax net. “What will happen if government imposed Rs 100 every month against every property/ erected structure for pulling Pakistan Railways, PIA or PSM out of crisis” .questioned a senior Telecom executive who wished not to be named.

Not more than three million people in Pakistan pay tax and indirect tax ratio is highest in the world. It has the lowest Tax to GDP ratio which is not more than 10.6 percent. Country’s Telecom sector is now faced with a lot of taxation and analysts fear it could well end up in lay-offs and job cuts to sector employees which will in turn be a burden for country’s economy.

”Unless government comes up with a concrete plan for recovery of country’s ailing corporations, undue taxes on Telecom sector would only give rise to uncertainty and a drastic cut in FDI”, the Telecom executive concluded.