Punjab to Again Tax Mobile Broadband

In a sudden reversal, Punjab is ready to tax internet broadband which was earlier revoked due to strong consumer backlash. The 19.5% tax, already implemented in Sindh since July 2014, will be applied in Punjab through a circular expected today (Friday).

News broken through The News, following are the details of the tax:

• Tax rate would be 19.5%
• Applicable on mobile broadband (3G/4G services)
• Applicable on DSL (wired/wireless) as well of above Rs. 1,500
• Exempted DSL for student packages, educational institutions, software exports and data usage for educational purposes

The tax was earlier implemented in May 28 notification that received strong backlash, including an online campaign by various Pakistani websites against the decision. Through a cabinet decision it was revoked and mobile operators kept waiting for notification in order to get confirmation and file their returns. Instead, despite decision from cabinet for removal of the tax, Punjab government is again implementing the tax and finance ministry would be issuing notification.

This will affect propagation of mobile broadband as cellular companies have been aggressively pushing network upgradation program to make internet available to masses. With new tax, Punjab province that holds over 50% of Pakistan’s population will be affected as people will either restrict their internet usage or not upgrade to higher speeds due to taxation.

It is also pertinent to note that the exempted DSL subscribers form a minority in the total subscribers, making mobile broadband subscribers the real affectees of this tax.

Khurram Zahid