Telcos Urge KPK Government to Remove Internet Taxes

Telcos Urge KPK Government to Remove Internet Taxes


After Punjab’s removal of internet taxes, mobile phone companies have now urged Khyber Pakhtunkhwa government to consider removing 19.5% tax that it deducts for wired and mobile broadband usage in the province.

A letter written by all mobile phone companies and PTCL to KPK Chief Minister, Mr. Parvez Khattak, said that provincial government should consider the removal of internet taxes in the province.

It maybe recalled that KPK government had imposed 19.5% sales tax on DSL, wireless and mobile internet in 2014. Mobile phone companies, however, aren’t charging taxes from their customers despite the fact that they are submitting the taxes to provincial government from their own pockets.

After Punjab’s reversal of Internet taxes, mobile phone companies are not expecting a similar treatment from Khyber Pakhtunkhwa.

Tax on mobile internet is rare in the world and Bhutan is the only country, after Pakistan, that levies tax on internet and there too the tax rate is merely 5 percent.

In the letter written to KPK Chief Minister, mobile phone companies explained that how internet tax is also a hindrance for telecom companies as they can’t allocate funds to roll out their services in the Province.

Moreover this tax acts as an entry barrier for subscribers to use internet in the province, where internet usage is already struggling with penetration being in single digits.

KPK government and PTI has been claiming to put special focus on education and youth development; with removal of internet tax, increased broadband penetration will not only impact positively on academic ventures of the KPK government but it will also help flourish the high-tech startup ecosystem involving young educated minds from the province.

Benefits of increased broadband usage — with tax-free internet — will also mean feasible and smooth e-health, e-education, e-farming and other similar internet and smartphone based projects.

Telcos reminded KPK CM that internet tax also opposes The Khyber Pakhtunkhwa (KPK) Youth Policy draft which envisions a promising framework for integrated youth development reforms and reaping youth potentials of the province.

Mobile phone companies, in the letter, said that removal of internet taxes will encourage the efficient roll out of high-capacity mobile broadband networks in the province, that will spur further investment and socio-economic growth of the industry in general and people of KPK in particular.