“Digital Pakistan” initiative faces a potential roadblock as telecom companies express vehement opposition to proposed measures in the Finance Bill 2024-25. The industry characterizes these measures as sudden, regressive, and capable of crippling the very foundation of the digital economy.
The telecom sector acts as the backbone for various crucial services, including e-commerce, freelance work, financial services, and government functionalities. Telecom companies warn that impractical tax burdens on non-filers, unfair penalties, and limitations on affordable mobile devices could have disastrous consequences.
In a letter to the Minister of Information Technology & Telecommunications, Shaza Fatima Khawaja, the industry highlighted several critical concerns. The proposed 75% advance tax collection on mobile services for non-filers is deemed infeasible due to existing infrastructure limitations. Furthermore, imposing penalties for non-compliance with Income Tax General Orders – a responsibility outside their control – is seen as blatantly unfair.
The most alarming proposition, however, is the increase in sales tax on mobile handsets below $500. This measure directly targets low-income groups, hindering their access to affordable devices and widening the digital divide. Affordable phones are considered essential for digital inclusion, and the proposed tax hike threatens to significantly impede progress towards a truly “Digital Pakistan.”
The telecom industry argues that these policies will stifle growth, potentially leading to job losses and hindering the overall economic well-being of Pakistan. They urge the government to reconsider these measures and engage in open dialogue to find solutions that foster a thriving digital ecosystem for the nation.
