Pakistan’s telecom sector is raising concerns due to high taxes

The Pakistan Telecom Operators Association has expressed concern over the high taxes introduced in the 2024 budget, ARY News reports.

In a letter written to the chairman of the Standing Committee on Finance, Salim Mandviwala, telecom operators expressed concern over the high taxes introduced in the budget.

The telecom sector has warned that foreign investments may withdraw from Pakistan if tax issues are not resolved. According to telecom operators, unresolved tax issues may result in legal complications for the government.

The letter emphasized that two major market participants have already decided to leave Pakistan. The letter said the telecommunications sector contributed PKR 340 billion in tax revenue last year and has attracted direct investments worth USD 15 billion so far.

According to the letter, the dream of a digital Pakistan will be seriously affected by the implementation of the budget proposals. The letter further mentioned that it is impractical to collect 75% advance tax from telecommunications users who do not submit returns.

The letter indicated that this decision would result in loss of revenue for both the telecommunications sector and the government. In addition, telecommunications companies have expressed concerns about the General Income Tax Regulation.

Read more: Non-registers will pay additional taxes on mobile phone top-ups and packages

Regarding the issue of blocking SIM cards of people who do not report, penalties are being considered in the telecommunications sector. The letter shows that the telecommunications sector is not a party to the tax issue regarding entities that do not file returns.

As mentioned in the letter, increasing the tax rate on sales of cell phones worth up to $500 will have a negative impact on the inclusion of low-income people in this group.

The telecom operators have asked for a date to meet commission chairman Saleem Mandviwalla to raise their concerns.