In the current day and age, when internet has become indispensable for routine human activities, Pakistan is still struggling to boost the rate of internet penetration across the country. To resolve this matter, the Government of Khyber Pakhtunkhwa (KPK) is considering a proposal to remove existing rate of 19.5% sales tax from fixed and mobile broadband services.
The Khyber Pakhtunkhwa Information Technology Board (KPITB) has proposed the recommendations to the government to cut sales tax on broadband services and sent it to Chief Minister Pervez Khattak for final approval. This news indicates that the Government of KPK is making efforts to boost internet accessibility in a bid to propel technological innovation in the province.
According to several reports, KPITB’s proposed revision of sales tax on internet services are based on the following terms:
- Data services to be exempted from sales tax on fixed broadband internet for usage under Rs 2500 per month and for up to 8 megabits per second (Mbps) connections;
- Data services are to be taxed at the existing rate of 19.5 percent sales tax on fixed broadband internet for usage above Rs 2500 per month and for connections above 8 Mbps connections;
- Data services to be exempted of sales tax on mobile broadband internet for usage under Rs 2500 per month.
It should be noted that the Government of Punjab has already removed 19.5% sales tax on wireless and mobile internet services, whereas the Government of Sindh has also waived some of the taxes on telecom and internet services recently.
This news has ignited excitement among internet users as many are desperately waiting for the government to remove sales tax from fixed and mobile broadband services.
All the stakeholders including telecom operators and PTA were requesting the Government of KPK to remove general sales tax (GST) on broadband internet and data services on mobile phones for quite some time. The mobile operators wrote a joint letter to the Chief Minister of KPK earlier in June 2015 requesting the government to remove GST on data and internet services as it is slowing down the penetration rate of 3G and 4G services throughout the province.