Cellphone users to pay lower taxes, says ministry

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Islamabad

The tax imposed on mobile phone users will reduce gradually after the federal cabinet approved granting the telecom sector the status of an “industry”.

The federal cabinet’s approval came on the recommendations of the Ministry of IT and Telecommunication, according to a tweet from the ministry.

The ministry said there would be a gradual reduction of taxes imposed on the telecom sector and mobile phone users.

Earlier on Thursday, Federal Minister for Information Technology and Telecommunication Syed Amin ul Haque said that this is a major achievement that will directly benefit not only mobile phone users but will also help spread the spirit of digital Pakistan (connectivity) to remote areas of the country.

From the next financial year (2021-22), advance income tax on mobile phone users will be reduced from 12.5 percent to 10 percent and in the financial year 2022-23, it will go further down to 8 percent, Haque said.

Similarly, the federal excise duty (FED) on telecommunication services has been reduced from 17 percent to 16 percent, the minister noted.

Haque said the government is planning on reducing 6 percent excise duty along with tax reduction on various services.

“Rs250 charges on SIM purchase have been withdrawn, and this will be beneficial for the public.”

Information and Communication Technology (ICT) export remittances — including export of telecommunication, computer, and information services — surged to $958 million at a growth rate of 40 percent during July-December in the current fiscal year of 2020-21, in comparison to $684 million during the same period last year, he added.—TLTP