ISLAMABAD: The telecom sector, which has invested over $25 billion in Pakistan, expressed deep disappointment as the federal budget failed to provide any relief to millions of telecom users in Pakistan who are burdened with exorbitant taxes.

CEO of Jazz Aamir Ibrahim expressing his dismay in a tweet, stated, “It is disappointing to see no relief extended to Pakistan’s 195 million telecom users in the budget, who continue to face the highest telecom taxes in the world. We cannot pursue our digital ambitions when Pakistanis bear a 34.5% tax for using the Internet.”

He further emphasized that neglecting the telecom sector, despite our entire economy relying on digital connectivity, is detrimental to Pakistan’s growth and competitiveness.

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Prior to the budget announcement, Aamir had also urged the government to recognise smartphones as productivity tools contributing to GDP growth, rather than treating them as luxury items subjected to excessive taxation. It is important to note that due to import restrictions and excessive taxes and levies on smartphones, the local mobile assembling industry is also facing an existential crisis, leading to the closure of several newly-established smartphone manufacturing units in Pakistan, which will ultimately further inflate the import bill. The government completely disregarded the budget proposals put forth by various trade associations and international bodies, which aimed to reduce taxes on telecommunication to promote affordable internet and data services for low-income segments of society. According to the OICCI, the overall 34.5% tax on telecom users, including 15% withholding tax (WHT) and 19.5% general sales tax (GST), makes Pakistan one of the most heavily taxed telecom markets worldwide. “Such exorbitant taxation hampers the digitalisation drive and overall economic growth.”

Copyright Business Recorder, 2023