Internet Tax in Punjab – Implications for Telcos
Recently, the Government of Punjab has levied a tax of 19.5% tax on all Internet connections which exceed 2Mbps and/or if the domestic Internet bill exceeds 1500 PKR as of May 29th 2015.
Earlier on, the Government of Pakistan had allowed a tax exemption to the province, which has now been withdrawn.
More than a year ago, the Pakistani Government maintained its stance that they had to go to as much extent as possible to support the development of technology and further the concept of wider internet availability across the county. All of the major Telecos were encouraged to participate in the 3G/4G Auction. Telecom companies in Pakistan have invested about $ 1.1 billion in the launching of 3G/4G internet and even more in the infrastructure for high-speed wireless internet.
However, all this investment has gone in vain, because the government has started taxing the 3G/4G data services in one single move at a time when the data users in Pakistan had quadrupled in the mere span of one year.
How this will, in the long run affect the Telecommunication Industry and the evolving technological platform of the country, is yet to be seen.
The tax has been levied on internet usage including DSL, 3G, 4G or any kind of internet over 2Mbps. It is bound to sabotage the multi-billion investment of the telecos and there is sure to be a decline in the constant growing number of high-speed internet users in the country after the implementation of this tax.