Senate body expresses reservation over taxation structure

ISLAMABAD: Senate Secretariat standing committee on Information and Technology and Telecommunication Thursday expressed reservations over the mechanism adopted by the Federal Board of Revenue (FBR) and Pakistan Telecommunication Authority (PTA) regarding the collection of taxes from cellular operators.

The committee met under the chairmanship of Senator Shahi Syed, while Senator Rehman Malik, Mufti Abdul Sattar Gianchand, Syed Shibli Faraz, Rubina Khalid, Osman Saifullah Khan, Taj Muhammad Afridi, and Naseema Ehsan also attended the committee.

The FBR informed the committee that Rs43 billion was collected as withholding tax and Rs2.7 billion Federal Excise Duty (FED) in 2015/16. Tax collection by provinces under the head of GST is excluding these numbers.

The committee gave the proposals for rationalising the taxation structure, as telecom is one of the heaviest taxed sectors in the country. The committee was informed that the provinces were charging different rates of GST on the telecom sector, and it had decided to take up the issue with the chief ministers of all the provinces where heavy service tax was being imposed on telecom Internet services.

Software was being developed for the telecom operators to directly reflect the taxes collected from customers, the FBR official said. “This software will be synced with FBR to ensure transparency in the system.”

State minister for information technology Anusha Rehman clarified the allegation from Senator Sardar Azam Khan Musakhel that Rs500 million of the dedicated USF money was spent for the construction of a stadium in Sialkot.

Anusha said, “The government of Pakistan can no longer utilise USF money for anything except for the dedicated purpose of expanding IT and telecom services in far flung and underdeveloped areas of the country.”

Over the issue of PTCL pensioners, an official told the committee that 40 cases of pension related problems did not fall within the jurisdiction of the federation; 11 cases of different nature pertaining to pensions have been finalised, four cases were of those seeking double pensions, and 33 cases would soon be disposed of by granting cheques to the pensioners after receiving their files. Chairman committee asked to calculate the pensions and to inform the committee in the next meeting.