After the federal budget of 2017-18, the provincial budget of Punjab 2017-18 is just around the corner, and the government is more than convinced to put a hefty tax once again on the use of internet and mobile broadband in the province.
According to sources, the provincial authorities including Dr. Umar Saif – Chairman PITB, Dr. Aisha Ghaus – Finance Minister, Chairman PRA and other PRA officials are reportedly meeting the representatives of telecom companies. The meeting which is being chaired by Dr. Saif is currently underway which is being attended by CEO/CFOs of the telecom companies.
The Finance Minister and Chairman are seemingly stern on declaring the internet a taxable commodity in the upcoming budget. On the other hand, the representatives are making all efforts to convince the province for not putting the tax since such a measure will devastatingly impact the consumption of internet in the largest province which also hosts the majority of telecom consumers in the country.
The rising price of the internet will directly affect the growth of IT in the province and might create an adverse impact on the growth trajectory.
Earlier, the federal finance minister Ishaq Dar in his budget speech had hoped that provinces would lessen the tax on telecom services. However, the central government itself has put some discriminatory taxes on the import of mobile phone, and telecom companies are still fighting for a rationalized tax structure in the country.
We are not sure that how much tax authorities might enforce this time as a bargain is going on at the moment. However, the tax imposition on the internet is nothing new, in 2015, just before the budget, Punjab Revenue Authority (PRA) had imposed an exorbitant 19.5% tax which was later revoked after much hue and cry from the telecom industry, online and print media.
There is a similar tax on the internet in KPK and Sindh as well. Sources have indicated that KPK government is considering to revoke the tax in the upcoming budget.