Pakistan’s telecom operators Monday rejected the government’s proposed tax of Rs0.75 on voice calls exceeding five minutes, stating that it is impossible to collect such a tax.
In a letter addressed to IT and Telecom Minister Aminul Haq, telecom operators stated that major disruption and damage to the service model structure of the sector will be caused if the government forces the tax upon operators.
“This levy will be unimplementable and will result in withdrawal of free minutes and bundles which are used by the majority of our customers,” it said, highlighting that more than 90 per cent of voice minutes are consumed through bundles, so if this facility is consequently withdrawn and normal rates are charged to the customers, their call rates will go up by multiples.
“Forcing this tax on subscribers will lead to fundamental changes in consumption behaviours, which will lead to shrinkage of the industry’s revenue base (possible shifting of voice revenues to over-the-tops) and potentially erode other taxation revenue streams of the government of Pakistan,” said the letter.
“As you would be aware, the poor strata of our society, which constitute most of our subscriber/consumer base, are already paying more than their due share of taxation, through withholding tax as well as general sales tax and federal excise duty on calls,” said the letter.
The letter called for the withdrawal of the “regressive” taxation measures and sought a meeting to discuss the same with the IT minister.
“It is our earnest view that the tax relief measures approved by the federal cabinet shall further bolster the government’s efforts towards achieving inclusive economic growth, creating new jobs, digitisation of economy to transform Pakistan into a knowledge economy and therefore such regressive taxation proposals taxing the common man using voice calls for connectivity need to be withdrawn accordingly,” it added.
“We are very hopeful that your continued patronage will stimulate industry stability and a delegation of our CEOs would look forward to meeting with you both at your earliest convenience to further discuss the same accordingly,” said the letter concluded.
