27/06/2021
The government’s proposal to increase taxes on mobile phone calls will hit prepaid customers, especially those from the lower-income group, the hardest.
According to the detail, the finance minister had announced the imposition of additional federal excise duty (FED) at the rate of 0.75 per 5 minutes on mobile phone calls.
The industry protested the proposed tax hike by the government because if the FED was implemented, the five-minute calls, which are now Rs 97 paise, would be Rs 2 72 paise.
Jazz CEO Amir Ibrahim expressed frustration over the imposition of 40% duty on users who do not have WhatsApp or smartphones to make calls.
“I urge the government to abolish this ‘anti-poor tax,” he said.
Telecom experts point out that additional FEDs on mobile calls are likely to affect those from the lowest income groups, such as labourers, guards, janitors, drivers and daily wage earners. I am away from my family.
Consumer rights volunteer Pervez Iftikhar believes that the low-income group has to make long calls on a daily basis to stay in touch with their families in remote areas.
He said that these long calls are made on a daily basis which is important for maintaining the social fabric of the family and the second group of long callers is mostly housewives who stay in touch with their relatives and friends Make calls for
“For people who have a lot of extra time, it’s important for their natural and overall mental health,” he added.
According to PTA figures, there are 183 million mobile subscribers in the country, of which 98 million use broadband/internet and 85 million make basic voice calls only.
A senior executive at one of Pakistan’s four telecom companies said the availability of smartphones for the low-income group was the biggest obstacle to internet access.
He further clarified that mobile broadband is not available in many remote areas of Pakistan.
Note that the government’s decision to impose an additional federal excise duty on call duration above five minutes would become 38 per cent costlier for the mobile phone users that would further go up after every five minutes, industry sources said on Saturday.
At present, the tax on a mobile phone call is Rs1.97 inclusive of the federal excise duty at 19.5 per cent; however, after the proposed addition of an additional duty of 75 paisas, the cost would be Rs2.72, according to a calculation of a leading cellular phone company.
The government through the Finance Bill 2021 had proposed additional federal excise duty on mobile phone calls above three minutes.
Besides, an additional FED on mobile phone calls, the government had also proposed an additional FED on the Internet services. These proposals attracted severe criticism from the general public, politicians and other stakeholders.
The government functionaries; however, announced that the increase of tax on IT and IT services was withdrawn at the Cabinet meeting and the announcement in the budget speech was an error.
On Friday, summarising the budget proposals in the Senate, Finance Minister Shaukat Tarin had said that the government had proposed to impose an additional FED on the phone calls above five minutes.
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