PTA, Ministry of IT fail to secure mobile sector tax relief

ISLAMABAD: The Ministry of Information Technology (IT) and Pakistan Telecommunication Authority (PTA) have failed to get any tax relief for the mobile sector, despite repeated requests.

The matter has become all the more urgent in view of the impending auction of 5G spectrum.

The telecom operators contended that a cut in mobile phone taxes was imperative to address the acute shortage of 5G-enabled devices in the market.

While the Ministry of IT and PTA advocated tax relief in support of the rollout, the FBR has outright rejected the proposal for immediate action.

FBR is of the belief that an immediate tax cut would affect the overall country targets of tax collection, which would leave operators in limbo.

Adding to concerns, the 5G spectrum auction policy directive did not offer definitive guarantees over how imported mobile phones were to be taxed, thereby fueling industry anxiety.

Though insiders maintain that the FBR still remains defiant to any immediate cuts, a revision in the current mobile phone tax structure is expected during the next federal budget.

The telecom operators and the consumers have to wait for the time being, as there is little chance that the cost of imported mobile phones will come down.

The above-mentioned situation presents rising friction between Pakistan’s revenue authorities and the telecom sector as the country gears up for a high-stakes push into 5G services.