Telecom Operators Association Urges Government to Reconsider Tax Proposals

The Telecom Operators Association of Pakistan has voiced strong objections to the coalition government’s budget proposals for the fiscal year 2024-25, cautioning that the increased taxes will precipitate a mass exodus of foreign investment from the country.

In a strongly-worded letter addressed to the Senate Standing Committee on Finance and Revenue, the telecom operators expressed deep concerns over the Income Tax General Order, which mandates the blocking of SIMs belonging to non-filers.

Read More: Pakistan Budget 2024: Major Investments in Electric Bikes and Energy Efficiency

The association vehemently argued that the telecom sector should not be held liable for the tax issues of non-filers, emphasizing that the industry is already grappling with numerous challenges.

The letter warned that the implementation of the proposed measures in the new budget would have devastating consequences for an already struggling industry, which contributed a substantial Rs. 340 billion to tax collection last year and has received direct investments totaling $15 billion to date.

The association cautioned that the new budget would severely undermine the Digital Pakistan initiative, a flagship program aimed at promoting digital transformation in the country.

One of the significant issues highlighted in the letter was the 75 percent advance tax recovery from non-filers, which the association deemed unfeasible and argued would result in a loss of revenue for both the telecom sector and the government.

The letter also contended that the increase in the sales tax rate on mobile phones worth up to $500 would disproportionately affect lower-income groups, who rely heavily on mobile phones for their daily needs.

The Telecom Operators Association has requested a meeting with Senator Saleem Mandviwala, Chairman of the Finance Committee, to present their concerns in detail and seek a resolution that would protect the industry from the adverse effects of the proposed budget measures.

The association’s letter serves as a stark reminder of the need for a balanced approach to taxation, one that takes into account the industry’s contributions to the economy and the need to promote digital inclusion.

By listening to the concerns of the telecom operators, the government can ensure that the budget proposals are tailored to promote the growth of the industry, rather than stifling it with excessive taxation.

Only by working together can Pakistan achieve its goal of becoming a digitally enabled economy, where the benefits of technology are accessible to all.

The Telecom Operators Association’s letter serves as a clarion call for a more nuanced approach to taxation, one that recognizes the industry’s contributions to the economy and the need to promote digital inclusion.

The government must take heed of the association’s concerns and work towards finding a solution that balances the need for revenue generation with the need to promote the growth of the telecom sector.

By doing so, Pakistan can ensure that its digital transformation journey remains on track, and that the benefits of technology are accessible to all.

The Telecom Operators Association’s letter has sparked a much-needed debate on the need for a balanced approach to taxation, one that takes into account the industry’s contributions to the economy and the need to promote digital inclusion.

As the government considers the budget proposals, it must keep in mind the need to promote the growth of the telecom sector, rather than stifling it with excessive taxation.

Only by working together can Pakistan achieve its goal of becoming a digitally enabled economy, where the benefits of technology are accessible to all.