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 Through a cabinet decision it was revoked and mobile operators kept waiting for notification in order to get confirmation and file their returns.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

The post Punjab to Again Tax Mobile Broadband appeared first on Smartchoice.pk.

The imposition of this provincial tax resulted in digital protest, led by several leading blogs and websites, that forced the Punjab government to re-think the proposal and ended up withdrawing the tax. While it is a success for the digital landscape, particularly of Punjab region, it is still a cause for concern in Sindh.

There are no viable taxation options in Sindh except taxing the already taxed, and since it is mostly middle-class of urban areas that can afford internet services above Rs. 1,500 or would need speed higher than 2 Mbps, people already paying a lot of taxes are laden with even more taxes. In recent budget, no relaxation over internet tax announced though telecom tax has been reduced from 19.5% to 18%.

This means, people in Sindh will saving about 1 rupee on every recharge of 100 rupee card. Despite the reduction the tax still stands higher by 4% compared to other provinces. The federal and provincial taxes on telecom services are a large source of revenue and Pakistan’s telecom sector is the most taxed in the region. With 3G/4G, the availability of internet to masses has dramatically increased, accessing areas that were inaccessible before and there are greater opportunities for internet propagation. Taxes, however, are not helping the cause and burdening pockets.

Despite this, Sindh budget is a deficit budget and requires support from federal government to meet its expenses. There doesn’t seem to be any indication these taxes would be relaxed anytime soon.

Khurram Zahid

The post Sindh Still Taxed While Punjab Remains Untaxed appeared first on Smartchoice.pk.