Govt’s decision to impose 8pc tax on NTC likely to be reversed

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ISLAMABAD: National Telecommunication Corporation (NTC) Managing Director Brig (r) Viqar Rashid Khan said that the government has identified the flaw in 8pc increase in taxation for NTC and chances are that the move will be rescinded.

Previously, 1.5pc tax rate was applicable on NTC.

The NTC MD was giving a detailed presentation on the services of the corporation and the challenges it faces to the Standing Committee of the National Assembly on Information Technology and Telecommunication. The committee met on Tuesday at the NTC Headquarters under the chairmanship of Ali Khan Jadoon.

MD Viqar spoke at length on the ICT services being offered by the corporation and the lack of government support, and legislation, that is causing challenges for the company despite the fact that NTC is “financially self-sufficient and does not ask the government for funding, unlike most other similar organizations”.

He said that for the first time since the turn of the decade, NTC has been able to reverse its losses in the past financial year. In his presentation, he said that in 2014-15, the revenues of the corporation were Rs2.8 billion, while the losses amounted to Rs146 million. In 2018-19, NTC managed to earn Rs3.9 billion in revenues and for the first time turned losses into a profit of Rs73 million.

He said that NTC has a deal with the government whereby they pay their profits to the government in a consolidation account, and if they are making a loss, the government pays them the amount of difference.

“If there is an 8pc tax, then even with these numbers we will end up making losses and it will not be favourable for the government. [Federal Minister for Economic Affairs] Hammad Azhar sat with us and heard our side of the argument and agreed to work with us on this taxation percentage,” the MD informed.

Brig (r) Viqar also told the committee about ongoing projects by NTC, including a National Data Center – the first of its kind cloud-based three-tier technology, costing approximately Rs450 million. He said that approximately 68pc outdated telecom technology (TDM) has been replaced by next-generation IP networks (NGN) while the remaining 32pc will also be converted in the next two years.

“The TDM equipment removed has also been reutilized in remote and less developed areas with respect to telecom technology resulting in savings of approximately Rs80 million for NTC,” he said.

Speaking on their services, the MD said that since NTC is solely providing services to the public sector organizations and also have to abide by the rules of the government, not only their costs are higher than other private telecom operators, but their target customers are also much fewer.

“We cannot simply lay off people unlike other organizations, and the salaries and pensions of these employees make up for 72pc of our total expenses. Likewise, we have to have the best equipment and security protocols because we are dealing with government data so we cannot cut corners from that end either. In such a situation, when the public organizations opt for private and cheaper options, that not only hurt us but also compromise the security of these government organizations,” he said. “There should be some legislation that leads public organizations to use our services, which will be as beneficial for them as it will be for us.”

Chairperson Ali Khan replied that while such a move makes sense in one way, it may lead to complacency in such organizations and therefore some sort of competition is to be maintained.

The committee also pondered over social media security and cybercrime with respect to MLAT and the members expressed exasperation on not being able to move ahead with the issue because of continued absence of stakeholders concerned. The committee decided to send a note of displeasure with the potential of sending summons if members of ministry of interior, FIA, and other related organizations fail to show up in the next meeting.

In other news, Senate Standing Committee on Information Technology and Telecommunication also met today at the Parliament House under Senator Rubina Khalid and delved on continued issues of lack of coordination among different departments related to disaster prevention and preemptive measures. The committee also briefly considered the lingering issues of pending pension payments of Pakistan Telecommunication Employees Trust (PTET). Both issues were deferred, when the chairperson gave National Disaster Management Association (NDMA), Pakistan Geological Department, Meteorological Department, and Pakistan Air Force six weeks to come up with a management plan for improved coordination and better preemptive practices for natural disasters like earthquakes and tsunamis.

 

2 COMMENTS

  1. I’m glad NTC consider for options to reduce the deficit, collaboration with multi-lateral agencies as ITU/UN, GSMA Barcelona 2020, the PTA, the PTCL for collaboration on the extensive digital network of FTTH to provide extensive nationwide network of G-Pon vis-a-vis Dhobi Ghat cable substitute to FTTH yet low cost, and compliant to Climate Change.
    Impartial for an impartial advise for the ITU/UN for membership additionally to cater to the nationwide network of FTTH serving secured digital networks at the cost much lower than the conventional black cable.
    The most essential security/reliability, with the digital networks of G-Pon through out Pakistan providing the Government with safest, secure network communication network from falling into wrong hands. ITU should be taken in the loop. I shall be too pleased to assist the NTC with important task to a profitable, digital telco., in Pakistan reducing the losses to the lowest to the GOP.
    the p.

  2. The PDMA, NDMA, Climate Change, the FTTH sustituions to the Dhobi Ghat Cable now a threat to Climate Change should be attented with participation to the upcoming GSMA 2020 how it can help with the forecast of Climate Change, and satellites for an early warning system.
    By the grace of Allah Pakistan has the treasure of capability, talent to help the region on these emergency Telecommunication management and early warning systems for saving disasters.

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