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PTA: Taxes on telecom services might be reduced
Posted by Ammar Faheem | Posted in Recession, telecom | Posted on 05-06-2009
Yesterday, a delegation comprising of CEO’s from all cellular operators met the Prime Minister of Pakistan, Mr. Syed Yousuf Raza Gilani pledging to make a combined investment of over USD 1 billion in the coming fiscal year.
Government will continue to provide incentives to telecom industry, says Gilani
ISLAMABAD (June 04 2009): Prime Minister Syed Yousuf Raza Gilani on Wednesday assured telecom operators that the government will continue to provide incentives to the telecom industry so that the sector may continue to attract more investment and create more jobs.
The Prime Minister was talking to the Chief Executive Officers (CEOs) of telecom companies in Pakistan who called on him here and discussed with him matters relating to the cellular companies in perspective of the upcoming budget. A statement said that the CEOs of Mobilink, Warid, Ufone, Telenor and China Mobile expressed their commitment to jointly invest at least $1 billion in infrastructure, capital expenditure and technology in the next fiscal year to complement the enabling environment that the government is providing as a stimulus…
Source: Business Recorder,
http://brecorder.com/index.php?id=918957&currPageNo=1&query=&search=&term=&supDate=
This was followed by news that is around in the print media that the PTA shall be recommeding tax cuts for telecom services for the coming fiscal year - I am sure telecom companies will breathe a sigh of relief if these recommendations of the PTA are actually implemented.
Here is an excerpt from the Daily Dawn:
Cellular firms want ‘friendly’ budget
LAHORE, June 4: On the request of the Pakistan Telecommunications Authority (PTA), the government may reduce General Sales Tax (GST) and SIM activation charges on telecom services in the upcoming budget.
The PTA will move the proposal on the demand of telecom companies, which plead that their revenue has been shrunk “drastically” owing to heavy taxes and stiff competition.
PTA Chairman Dr Muhammad Yasin told Dawn on Thursday if the government accepted the authority’s suggestions, it would encourage the foreign direct investments (FDIs) and help sustain growth in the sector…
Source: Dawn
The telecom industry is in a dire need for policies that encourage and supplement telecom growth in Pakistan. Expansion and investment initiatives have been hampered by a drastic devaluation of the Pakistani Rupee by upto PKR 20 against 1 USD. This has effected the overall profits of the foreign players in the Pakistani telecom market and forced them to pull their brakes.
We hope the government considers this proposal and brings about policies encouraging further FDI - especially when we are preparing for a 3G rollout (as per the PTA plans on paper) - and supplementing and strengthening telecom companies in Pakistan.
I am an ordinary Pakistani Nationalist, an undergraduate student in my final year of Telecom Engineering. A passionate web developer and designer too.
well written ammar, the cellular companies are right in their own way to ask for cut down in taxes but the PTA increased them in the first place because of the low revenue being generated! so whats the point in now cutting of the tax if they still dont have an alternative for it?
as far as customer point of view is considered it will be a sigh of relief, and maybe just may be this act would play a pivitol role in stabalizing the telecom market. 3G liscene (as per PTA on paper plans) should be out till the end of this year, but we all know the rate at which promises are delivered.
Thank you, Ali, for the nice words.
I believe it is a win-win situation for both the customers and the operators alike if these recommendations are indeed implemented.
We have to *encourage* more FDI into the telecom sector rather wait for the government to earn revenues. Slow and steady, I believe so, will win them the race (the government). We cant afford to be impatient by levying heavy taxes on this growing industry..