Higher tele­com taxes re­duc­ing adop­tion

The Pak Banker - - NATIONAL -

Higher tele­com taxes are dis­cour­ag­ing con­sumers and com­pa­nies which is re­sult­ing in re­duced adop­tion that is detri­men­tal na­tional pro­duc­tiv­ity, a busi­ness leader said Sun­day.

Ac­cord­ing to a study, a price in­crease of 1 per­cent leads to a de­crease in con­sump­tion by con­sumers of ICT goods and ser­vices of any­where from 0.2 per­cent to 3.8 per­cent, said Pa­tron Is­lam­abad Cham­ber of Small Traders Shahid Rasheed Butt.

He said that ac­cord­ing to the World Bank, ev­ery 10 per­cent pen­e­tra­tion of broad­band con­trib­utes 1.38 per­cent to GDP but this is ig­nored in Pak­istan where tele­com in­dus­try of is dy­ing un­der bur­den of taxes.

Pak­istan's tele­com sec­tor is se­cond high­est taxed in the world which has dis­cour­aged in­vestors re­sult­ing in lower 3G and 4G pen­e­tra­tion and dra­matic drop in di­rect for­eign in­vest­ment, he said. Shahid Rasheed Butt said that DFI plum­meted by 72 per­cent for the fis­cal year end­ing June 30th, while the tele­coms in­dus­try con­trib­uted 50 per­cent less in taxes com­pared to the pre­vi­ous year.

He said that bio­met­ric sub­scriber ver­i­fi­ca­tion that re­sulted in over­all con­nec­tion num­bers drop­ping by 18 per­cent while it cost tele­com in­dus­try 60 mil­lion dol­lars. He said that cell phones and mo­bile in­ter­net is im­por­tant tool to re­duce poverty there­fore pol­i­cy­mak­ers should con­sider pro­vid­ing re­lief to tele­com in­dus­try reel­ing un­der heavy tax­a­tion.

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