ISLAMABAD: The government has refused to entertain telecom sector demands for paying licence fee in rupees instead of dollars as well as slashing the Withholding Tax and GST on the telecom sector.
Federal Finance Minister Ishaq Dar accepted the proposal of information technology (IT) exporters as he instructed the SBP to increase the 35 per cent limit on retention of foreign currency and allow its free movement on the demand of IT sector exporters. He refused to accept the demand for payment of licence fee installments in rupees mainly because the country requires dollars so this facility cannot be provided at this juncture. The telecom sector had demanded placing a cap on the pricing of the telecom sector, but there was no agreement among the market players so it was asked that the PTA should deliberate on this issue.
On the demand of the telecom sector for reducing the Withholding Tax from 15 to 10 per cent and GST on services from 19.5 per cent to 16 per cent in all provinces, it was told that these demands could not be fulfilled in the current fiscal year because the government had committed itself to the IMF that the taxes would not be reduced for any sector.
The reduction in taxes would be considered only in the budget 2023-24. On the issue of the Universal Service Fund (USF) for reducing it up to 0.5 per cent, it was decided that it would be deliberated further and the PM would take final decision.
Dar assigned SAPM Sheza Khawaja for holding a meeting with stakeholders to deliberate on issues and finalize recommendations for the PM.On the other hand, the Ministry of Information Technology and Telecom has been asking different government agencies for facilitating the IT and Telecom sector. In light of the directions of the prime minister, a meeting was convened between SBP & FBR representatives and MOIT/PSEB and PASHA teams under the chairmanship of SAPM for Youth Affairs Sheza Khawaja at the Prime Minister’s Office on Monday.
