ISLAMABAD: The Global System for Mobile Communications (GSMA) has conveyed serious concerns to Finance Minister Shaukat Tarin over the introduction of a new levy of Rs 0.75 per voice call exceeding five minutes, saying it will increase the compliance cost for the government and mobile sector, besides creating uncertainty for sector, planning investment as part of planned spectrum auction.
The GSMA Head of Asia Pacific, Julian Gorman, wrote a letter to the finance minister on federal budget 2021-2022, and recommended for the removal of the new levy of Rs 0.75 per voice call exceeding five minutes.
The GSMA head stated that over the last few years, the Government of Pakistan and the mobile sector have engaged in a dialogue to rethink mobile sector taxation in order to boost Pakistan’s transition to a digital economy.
The GSMA commends the Government of Pakistan for adopting the tax reform measures approved by the Federal Cabinet.
We trust that these will support the adoption and usage of mobile connectivity by citizens and businesses and will improve business environment in Pakistan.
The telecommunication sector is a key enabler for social and economic growth and these tax reforms will contribute to spread these benefits more widely within society.
“However, we wish to express our concerns regarding the introduction of a new levy of Rs 0.75 per voice call exceeding five minutes, as per the speech of the Honourable Finance Minister in the Senate of Pakistan on 25th June 2021 and later approved by the National Assembly as part of Finance Bill for 2021-22,” he added.
The letter further stated that the late introduction of such levy would negate the aforementioned tax reforms by raising the cost of mobile services, in particular for low-income households.
From an operational perspective, the new levy will significantly increase the compliance cost for the government and the mobile sector due to the challenge of implementing such tax.
In addition, the new levy would create an additional barrier and slow the progress to close the usage gap.
Furthermore, due to its negative impact on demand and perspective of development for the mobile sector this new levy creates uncertainty while the mobile sector is planning long-term investment as part of planned spectrum auction presenting a significant risk for the government achieving the Digital Pakistan Vision.
“We invite the Government of Pakistan to consider the removal of this levy. The GSMA remains available to engage further,” he added.
Copyright Business Recorder, 2021
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