Federal Government has, once again, hammered the Internet services in Pakistan. While the digital publishers and IT experts are already questioning high tax rates on Internet, the government has imposed yet another tax on the sector. The advance tax on Internet is imposed in all provinces of Pakistan.
Remember, KPK and Sindh government has already imposed 19.5% tax on wired internet services. Punjab government was also in plans to do so but later, cancelled the proposal. The efforts are being made by bloggers to withdraw the tax on Internet in KPK and Sindh However, this move from Federal Government certainly gonna hurt the efforts toward cheap and accessible Internet in Pakistan. As it is a with-holding tax (to be collected by Federal Government), it can be reclaimed at the time of filing returns.
The government will be charging 14% advance tax on monthly internet bill of Rs. 1,000 or more. It means anyone with Rs. 1,000 monthly internet bill will have to pay Rs. 140 extra as WHT. And if you are residing in KPK and Sindh, the amount will be even more i.e. Rs. 333.5 (140 + 1000*19.5). ISPs have started informing its customers about the new tax. Those customers who file their return can claim 14% WHT back and those whom don’t will not get their money back.
Still it is not confirmed whether this tax on internet will also be charged by telcos on 3G/4G usage. However, whatever the scenario is, this is definitely gonna hurt the growing IT industry of Pakistan. We are already paying most tax on telecom and internet services. This tax contradicts Government promises to promote e-commerce and IT sector in the country.
What are your views on this government move? Share your thoughts with us in comments section below.