LAHORE: The Punjab government has decided to impose the General Sales Tax (GST) on internet use in the province after one-year delay as the telecom companies have failed to give any incentive to the people during the said period against the favour given by the provincial government in the last budget.
The decision was made during a meeting attended by the top officials of telecom companies and tax experts held on Tuesday, chaired by Punjab Finance Minister Dr Ayesha Ghaus Pasha. Special Adviser to the Chief Minister Dr Umar Saif, Punjab Revenue Authority (PRA) Chairman Dr Raheel Siddique and other officials were also present on the occasion.
“What benefits and advantages are being given by the internet service providers to the users in Punjab as the government gave relaxation in a bid to boost internet penetration and to promote e-governance when the other provinces are already deducting this tax”, the finance minister asked the telecom sector representatives.
She also took them to task by asking why the telecom companies were not sharing the internet usage data with the PRA despite repeated requests. “Are there any special services being offered to the people of Punjab not available to the other provinces which are already deducting the tax from the telecom companies?” asked Dr Pasha.
The government is estimating around Rs5 billion revenue through GST on internet usage – a decision which was postponed after strong lobbying of telecom companies last year. However, the government is still likely to give some relaxation to the sector by giving a lower tax rate instead of 19.5 per cent. It is expected that 15 per cent GST would be imposed, which will likely be brought at par in the coming years.
Furthermore, the telecommunication sector is also not cooperating with the PRA as around over Rs6 billion of provincial tax is already due to cellular operators which they are contesting in the court of law.
The minister asked the telecom companies officials to share the internet usage data with the PRA and said they might also submit their budget proposals, which could not be delayed as the provincial budget would be announced on June 2 (Friday).
Therefore, the telecom companies have only one day to submit their proposals, while various proposals prepared by the PRA were also discussed in the meeting. The meeting acknowledged the fact that the consumption of internet and other telecom services was higher in the Punjab – having the largest population size – than the other provinces, while penetration of 3G/4G services had also improved.
