At the end of FY 2010, the total contribution was over Rs109 billion of which almost 50 percent came from GST. In the first half of the FY 2011, the total contribution to the national exchequer was Rs56.3 billion, which was almost Rs49 billion in the first half of FY 2010, showing a growth of 15 percent since last year.

According to an estimate, the telecom sector contributes more than 90 percent share in total taxes by the services sector of Pakistan, which is being diverted to the provinces under the 18th Amendment.

Similarly, the share of GST in total contribution from the telecom sector is also very impressive where almost 50 percent of the total contribution comes from GST collection.

According to official data available, in the first half of FY 2010-11, total GST collection is Rs23 billion which was Rs21 billion in the same period of FY 2010. The GST collection in telecom services mainly comes from mobile sector and its share in total GST collection is 86 percent followed by basic services as 11 percent.

The activation tax contribution to national exchequer stands at Rs3 billion at the end of  first half of FY 2010-11, which was Rs4 billion in the same period last year.

The main reason for drop in the activation tax is due to market maturity.

Copyright PPI (Pakistan Press International), 2011