IT and industry minister express dismay at budget measures – Journal

ISLAMABAD: IT minister expressed dismay at ‘limited relief’ given to sector and ‘negligible tax support’ to telecommunications industry.

The industry has also issued unwelcoming statements about the budget measures announced by the Minister of Finance.

Responding to announcements made by Finance Minister Miftah Ismail in parliament on Friday, IT and Telecommunications Minister Syed Aminul Haque said the Finance Division should immediately consider proposals sent by the IT Ministry to boost the sector and maximize its potential.

“The decision to remove withholding tax and certain other conditions on the IT industry as well as the removal of capital gains tax from those who invest in the IT sector may be beneficial, but these measures are insufficient,” Mr. Haque said in a statement after Mr. Ismail’s speech in parliament.

Telecom sector says there is no business case for new investments unless average revenue per user reaches at least $2

“It’s important to understand that the telecom industry was the backbone of the IT industry because the majority of IT businesses were based on telecom and data services,” he said. “Without means of communication, how can we achieve the goals set for the IT sector, which is entirely dependent on global connectivity? »

“Highly Taxed Market”

Similarly, the telecommunications industry has also expressed concerns about high tax rates and other charges and informed the Ministry of Finance of the “strict conditions” imposed by policymakers and regulators.

“Our consumers are taxed at one of the highest rates in the world,” Telenor CEO Irfan Wahab Khan told Dawn and lamented that high taxes have also increased spectrum and license renewal costs. .

He said the industry was operating in an uncertain and unpredictable business environment, particularly with respect to taxes, spectrum roadmap, NoC certificate fees and right of way issues. .

The telecommunications industry pointed out that the cost of doing business has increased significantly under various headings, including spectrum fees which have risen from $291 million to $486 million, while taxes have climbed to 34, 5% over the years, “making Pakistan one of the highly taxed telecom markets”.

The GSMA – an organization that represents the interests of mobile network operators around the world – also reported that Pakistan is ranked 235 out of 238 countries in terms of the lowest average revenue per user (ARPU) per month, which rose from $9 in 2003. to about $1 in June of this year. ARPU is a key tool for measuring the financial health of cellular mobile operators (CMOs).

Meanwhile, Jazz CEO Aamir Ibrahim said the government must cut industry taxes to make telecommunications services affordable for consumers. In doing so, the government would also benefit from overall economic growth due to the contribution of telecommunications and the internet to growth, he said.

“Relevant policymakers need to ensure the industry remains sustainable through assured return on investment, and if ARPU is not at least $2 by next year, there will be no no business case for investing more in improving quality or coverage,” Ibrahim said. .

Amir Allahwala, president of the Association of Mobile Phone Manufacturers of Pakistan, said that while it was essential to support the difficult decisions made in the budget, the manufacturing of mobile phones was a high-tech industry with the help of foreign direct investment of Chinese mobile phone brands.

Therefore, it was imperative to ensure continuity of leadership and consistency of policy to ensure the success of mobile manufacturing in the country.

Posted in Dawn, June 26, 2022

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