Punjab wants Rs. 5 billion Tax on the Internet

tax on internet

We reported earlier that Punjab government had a meeting with major telecom companies for discussing how it can put a tax on the internet similar to other provinces.

Although, Special Advisor to CM, Dr. Umar Saif said “it was a good meeting with all the telcos,” however, the statement clearly indicates that it was a favorable session in support of Punjab Government with a single communication to the telecom companies; The Internet would be Taxed this Time.

The meeting that was chaired by Finance Minister Dr. Ayesha Pasha along with Dr. Umar Saif and attended by Chairman Punjab Revenue Authority Dr. Raheel Siddique and other officials had a single agenda that telecom companies will need to pay tax as they haven’t responded well to the favor given to them in the past. When every province was deducting tax, Punjab was the only province which provided the relaxation in the previous budget.

The Finance Minister inquired the CEOs and CFOs of the companies;

Despite getting the favor of abolishing sales tax on the internet more than a year ago what benefits the telecom companies had given to people of the province. The only agenda for providing relaxation was to boost internet penetration and promote e-governance”.

“Ever since the tax holiday, did telecom companies provide any special services to the people of Punjab in return which other provinces are not enjoying where the tax is in place. Therefore there is no reason to keep the tax withdrawn?”.

“Why despite repeated requests from PRA, telecom companies did not share the internet consumption data?”.

On the other hand, CEOs of telecom companies, who are already appealing to the government for tax rationalization, while talking to MORE said, implementing such a tax will hamper the efforts to make Pakistan a digital economy as affordability is a major factor for many.”

“Although everyone opposed the idea of taxing the internet, however, we had no option but to listen,” told a CEO of the telco.

Sources have indicated that Punjab government is likely implementing a 15% general sales tax unlike a 19.5% that was imposed in 2015 and later revoked by the government after telco’s massive lobbying and pressure created by digital and print media.

PRA is looking to collect some Rs. 5 billion in revenue from the GST by putting the tax on the internet. There is another Rs. 6 billion tax yet to be recovered from telecom companies for which companies are already contesting the case in court.

Finance Minister has asked telecom companies to share their data with PRA along with any joint proposal before the provincial budget which is scheduled for June 2.

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