To offer the most efficient/effective tax model in the telecom sector and a revamped tax structure for cellular businesses, the Pakistan Telecommunication Authority (PTA) plans to engage tax advisors.
In this context, the PTA planned to employ tax consulting firms to handle important responsibilities, such as;
(i) tax advice on existing tax structure
(ii) advice on the PTA’s existing tax structure and contractual arrangements in relation to its position within the telecommunication industry
(iii) proposing most tax efficient/effective model for accounting
(iv) tax status of various PTA matters with tax authorities and forums.
Scope of Hiring Experts By PTA For Telcos Taxation
The tax services’ scope included;
(a) preparation and filing of corporate tax return with Inland Revenue Department, including underlying Income/Sales tax computation on finalization of accounts and revision of return, if required
(b) preparation and filing of refund application for a refund due, if any
(c) attendance before tax authorities including Inland Revenue department, Appeal authorities and tribunal, and responding to notices issued in connection with corporate/sales tax return and audit proceedings till finalisation of assessment for income/sales tax or FED
(d) assistance in giving tax credits as per Income tax ordinance 2001 and related Sales tax or FED, wherever applicable
(e) responding day-to-day notices and other correspondence with Inland Revenue, and applet authorities concerning items listed as ‘a’ to ‘d’ above
(f) help in interpreting and intimating of any changes in income tax, sales tax, federal excise and custom duty laws, if and when required.
The authority declared that it has a mandate to control the Pakistani telecom business, provide licenses, and establish a just system in the telecom industry.
Along with other things, the PTA is required to collect fees from companies offering telecom services under licences it has issued.
Additionally, a modification to the ACT makes the PTA’s income taxable, and the Finance Act of 2006 mandated such agencies to be taxed.
Pakistan is one of the most highly taxed telecom markets in the world, ranking second highest in South Asia for telecom taxation, with an overall 34.5 percent tax on telecom users, including a 15 percent advance income tax (AIT) and a 19.5 percent GST.
The economy’s drive towards digitalization is hampered by the astronomical taxes placed on telecom services.
Understanding the value of having a mobile phone and access to the internet at an affordable price is a proactive action intended to further the digitization of all areas of the economy, including education, health, commerce, etc.
To read our blog on “PTA direct Telcos to have 8-12 hours support due to Biparjoy,” click here.
