The federal government is proposing lowering telecom subscribers’ Advance Income Tax (AIT) from 15% to 10%.
According to sources, Federal Minister for Finance and Revenue Miftah Ismail met with a telecom sector delegation at the Finance Division, which included CEO-Jazz Aamir Ibrahim and CEO Telenor Pakistan Irfan Wahab Khan.
Furthermore, the telecom industry requested that the minister address its concerns about advance income tax, the implementation of taxes on imported phones, and the review of the Cash Margin Requirements (CMR) on mobile phones.
Because Pakistan has one of the highest-taxed telecom marketplaces in the world, the industry has asked the government to decrease AIT on telecom consumers from 15% to 8%.
It’s worth noting that AIT was decreased from 12.5 percent to 10 percent in fiscal year 2020-21, with a pledge to lower it to 8% by 2021 under the Finance Act.
However, only six months later, the decision was reversed, with no regard for the long-term consequences.
The AIT rate has been raised from 10% to 15% thanks to the Finance (Supplementary) Act 2022.
According to sources, the group also requested that the government examine tariffs on imported phones.
Imported luxury phones such as Samsung and iPhone should be subject to charges, but the levy on other mobile phones should be reconsidered.
Similarly, the telecom delegation asked the finance minister to reduce the Cash Margin Requirements (CMR) on mobile phone imports from 100% to 10% in next year’s budget.
It is worth noting that the SBP imposed 100 percent Cash Margin Requirements (CMR) on the import of 177 commodities with immediate effect in April this year in order to reduce the unabated import bill.
According to a statement published by the Finance Ministry, the telecom delegation briefed the Finance Minister on the role of the IT sector in Pakistan’s economic progress.
The Finance Minister highlighted the importance of information technology and telecommunications in the country’s overall economic development.
Furthermore, the Finance Minister informed the group that he would provide all necessary assistance with tax difficulties and underlined the importance of contributing more to the growth of IT and telecom-related exports.
The team expressed gratitude to the Finance Minister for his assistance and cooperation.
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