LAHORE - It seems that our incumbent rulers have deemed that tax imposition is the sole remedy to all financial ills but in doing so they are rather hurting the country’s economy by taxing even the already heavily taxed sectors like the banking and telecom services.
The common folks as well as economic experts have failed to understand the rationality behind the country’s financial managers’ recent move to impose more tax on the telecom sector. They believe the same goes for withholding tax on banking transactions. Moreover, to add to the miseries of masses, it’s another move of increased taxes on vehicles’ registrations.
“The government of Pakistan reportedly imposed 14% tax on internet across the country in the new budget and after the imposition of this new advance tax 14% of the bill amount is supposed to get deducted on internet usage across Pakistan”, said a tax expert while talking to this scribe.
Before this back in 2013, the country’s economic managers announced to increase the tax rate on telecom services by 5 percent. Finance Minister Ishaq Dar, who still hold this portfolio, said that all telecom users would have to pay 15 percent withholding tax that was previously 10 percent and had been so for the last so many years.
Provincial governments are imposing their own taxes on telecom and communication services. For internet users in KPK and Sindh, the customers will have to pay 14% WHT and another 19.5% as GST. So a total of 33.5% tax for using internet.
“Such harsh tax measures are simply enough to kill the IT and telecom sectors, which at present is among the very few sectors that are doing well in Pakistan. On contrary, the economic managers are least bothered about the PTCL recoveries that have been pending for the last 10 years”, added the expert. There is no tax on import of telecom equipment but taxes on 3G and 4G and Internet is killing the e-commerce businesses apart from increasing communication costs for the common users.
The economists believe that increase in the taxes as for the people who already pay heavily in this regard will be of no use and would rather prove to be counterproductive.
The country’s economic managers need to review their taxation policies and also need to include all the stakeholders in the consultations on moves such as taxation and other acts that impact them.
“Those who formulate the economic policies of this country need to avoid burdening common people and avoid levying more taxes on sectors like banking and telecom etc as it will bring more suffering to the common man who faces serious problems of price hike and inflation”, the tax expert concluded.