Sindh Govt Withdraws Tax Relief on Telecom & Internet Services

It seems to be a deception that Sindh Government provided relief to customers of telecom and internet services in the province while announcing tax deduction and exemption on services.

As it turns out, the Sindh government again imposed old taxes few weeks later after gaining short-lived popularity through the press for its earlier measure.

Sindh Board of Revenue (SRB) recently issued another notification in which it not only withdrew exemption on internet taxes but also restored GST on telecom services at 19.5 percent—at par with Punjab, KPK and Baluchistan.

GST tax rate has been restored on SMS, MMS, landline, changing of phone connection, installation of phone extension,  cost of telephone set, even on dial-up internet service and prepaid calling card, and the list goes on and on. Only Apps downloads are not mentioned in the list because it is not under the control of the revenue collection authority.

The earlier notification stated that taxes on internet services have been removed from monthly tariff of up to Rs. 1,500 for 2MB connections and up to Rs 2,500 for above 2MB and below 4MB speeds.

Besides this, tax exemption was taken back on the international leased lines or bandwidth services used by software exporting firms registered with the Pakistan Software Exporting Board.

Previously not only telecom sector was given relief but different sectors of services were also treated the same including banking, insurance, advertising and hospitality.

In the earlier notification, the provincial revenue authority attached a condition of tax deduction on the operators to pass on the impact of 0.5% to the customers. However, telecom operators were not conveyed this communiqué by the authority at large. Neither internet services providers received any notification and implemented it.

Officials at Telenor Pakistan seemingly received the notification and responded to the same but it did not receive a fresh notification from the authority that was related to reverting the decision of tax deduction.

It is a sad state of affairs that a provincial authority under policymakers (elected politicians by the people) is undecided about giving relief to masses through reducing taxes. It played with the sentiments of people.

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