Overseas investors suggest abolition of WHT on telecom

ISLAMABAD: The Overseas Investors Chamber of Commerce and Industry (OICCI) has demanded abolition of withholding tax on telecom services and Internet.

The OICCI in its budget proposals asked the government to abolish withholding tax on telecom services and Internet to promote the affordability of internet and data services for low-income segments of society.

“Telecom consumers are paying 34.5 percent tax in aggregate,” the OICCI stated. “15 percent withholding tax and 19.5 percent sales tax have been by the consumers in Telecom sector,” OICCI said.

OICCI stated that the high rate of taxation on telecom services and Internet affecting economic growth of the country.

The majority of overall 195 million telecom subscribers fall below the taxable limit, and high taxes hinder the affordability of mobile services, which are critical for the entire population. More than 70 per cent of Pakistan’s population lives below the poverty line, according to the OICCI.

The OICCI has also recommended to the government to reduce the custom duty rates for batteries to 5% and abolish additional custom duty and regulatory duty, to encourage the use of alternate energy resources in the telecom sector, such as solar.

The OICCI also urged the abolition of the advance tax on auction/renewal of licenses. Since spectrum is not sold, but only a right to use spectrum for a specified term is granted to telecom operators, and licenses are granted for a specific term only, this tax should be abolished as it is irrational.