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Category: IT & Telecom

Explore IT and Telecom stories with Pakistan Revenue, your go-to source for the latest updates on Pakistan’s technology and telecom sector. Stay ahead with real-time industry insights and economic developments.

  • FBR directs car manufacturers to pay KIBOR+3% on late delivery

    FBR directs car manufacturers to pay KIBOR+3% on late delivery

    KARACHI: In order to avail concessionary rate of duty and taxes, the Federal Board of Revenue (FBR) has made it mandatory for car manufacturers to pay KIBOR+3 on late delivery of motor vehicles.

    In order to implement the decision, the FBR issued SRO 837(I)/2021. The FBR said: “The concessionary customs duty for various models of new entrants under Automotive Development Policy (ADP) 2016-21 to continue for five years from date of first manufacturing certificate of respective various issued by the Engineering Development Board (EDP) or up to June 30, 2026, whichever is earlier.

    “The importer-cum-assembler or Original Equipment Manufacturer (OEM) shall pay KIBOR+3 per cent per annum to the customer against late delivery exceeding 60 days of initial booking on the whole of the deposited amount. Statement/details of reimbursement at KIBOR+3 per cent against deliveries beyond 60 days shall be submitted to EDB or Input-output Coefficient Organization (IOCO) bi-annually.”

  • IT exports, services granted 100% income tax credit

    IT exports, services granted 100% income tax credit

    ISLAMABAD: The government has granted 100 percent tax credit to persons engaged in exports and services of Information Technology (IT), sources in Federal Board of Revenue (FBR) said on Monday.

    Through Finance Act, 2021 incomes of persons engaged in IT exports and services have be allowed a tax credit equal to one hundred per cent of the tax payable under any provisions of Income Tax Ordinance 2001, including minimum, alternate corporate tax and final taxes for the period, to the extent, upon fulfillment of conditions and subject to limitations detailed as under:—

    — a startup as defined in clause (62A) of section 2 for the tax year in which the startup is certified by the Pakistan Software Export Board and the next following two tax years; and

    — Income from exports of computer software or IT services or IT enabled services as defined in clause (30AD) and (30AE) of section 2 upto the period ending on the 30th day of June, 2025:

    Provided that eighty percent of the export proceeds is brought into Pakistan in foreign exchange remitted from outside Pakistan through normal banking channels.

    The tax credit under shall be available subject to fulfillment of the following conditions, where applicable, namely:—

    (a) return has been filed ;

    (b) withholding tax statements for the relevant tax year have been filed in respect of those provisions of the Ordinance, where the person is a withholding agent; and

    (c) sales tax returns for the tax periods corresponding to relevant tax year have been filed if the person is required to file Sales Tax Return under any of the Federal or Provincial sales tax laws.

  • Finance Act, 2021: Withholding tax on phone, internet usage reduced

    Finance Act, 2021: Withholding tax on phone, internet usage reduced

    ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday said that the withholding tax rates on usage of phone and internet have been reduced to 10 per cent from 12.5 per cent with effect from July 01, 2021.

    For tax year 2022 the rate has been reduced to 10 per cent and it will be further reduced to 8 per cent beyond the tax year 2022.

    The FBR said that the withholding tax is applicable under Section 236 of the Income Tax Ordinance, 2001. Through the Finance Act, 2021 the withholding tax rates on the usage of phone and internet have been reduced from 12.5 per cent to 10 per cent for tax year 2022 and 8 per cent onwards.

    The FBR said that the Finance Act, 2021 inclusion of telecommunication sector in the definition of industrial undertaking under clause (29C) of section 2 of the Ordinance. This will enable them to adjust tax

    deducted under section 148 on import of capital equipment and plant & machinery for their own use. Reduction of withholding tax rate under section 153(1) of the Ordinance on telecommunication services from 8 per cent to 3 per cent under minimum tax regime.

  • Ericsson launches international innovation awards

    Ericsson launches international innovation awards

    KARACHI: Ericsson (NASDAQ: ERIC) has launched its annual Ericsson Innovation Awards (EIA) 2021, a global competition with a grand prize of €25,000 that offers university students around the world, including from Pakistan, the chance to develop new, innovative ideas with support from Ericsson experts.

    The theme in 2021 is ‘Bridge the Digital Divide’. The digital revolution has transformed the world, enriching lives in countless ways yet half the planet lives without access to the tools, information, and resources that many of us rely on every day.

    Ericsson Innovation Awards is open to students currently enrolled in University studies. Students from around the world are invited to enter the competition and are encouraged to form diverse teams of two to four members. Teams must register and submit their ideas by August 5th at 11 AM GMT and the first 50 submissions will receive extra guidance for refining their ideas.

    Innovations come in all sizes, from simple changes in code that could redefine the networks of the future to complex technological advances that will advance humanitarian efforts across the world. We believe that young people drive innovation and development when it comes to current pressing issues. That’s why, with innovation at the heart of Ericsson, we want to invite young talents to register for Ericsson Innovation Awards 2021, said a statement.

    Each of the seven regional winners will receive €1,000 cash prize and in some cases, additional special recognition and prizes offered within respective regions.

    All 14 Semi-finalists – including the seven regional winners – will receive Seven weeks of mentorship from Ericsson experts in innovation and business, recognition on Ericsson social and digital media, the possibility of Ericsson recruiter interviews (if any suitable positions are available at the time) and certificate of achievement. 

    All three finalist teams will receive Grand Prize Winner: €25,000, 2nd Place: €15,000, 3rd Place: €5,000, Bonus: Social Media Prize: €2,000, an invitation to the Ericsson Innovation Awards Grand Final, an additional four weeks of mentorship and recognition across Ericsson social media and digital channels. 

    All three Finalists will have their entries uploaded onto the Instagram page of @ericssoncareers, and for the 24 hours before the Grand Final, anyone can vote on this page. The team who receives the most votes will win an additional €2,000.

  • Phone calls above 5 minutes to be chargeable additional 75 paisa

    Phone calls above 5 minutes to be chargeable additional 75 paisa

    ISLAMABAD: The government has imposed additional 75 paisas as federal excise duty (FED) on a mobile phone call if its duration exceeds five minutes.

    The national assembly approved the changes in the law after the Federal Board of Revenue (FBR) will collect additional 75 paisa FED on a call above five minutes.

    According to the law, mobile phone call, if call duration exceeds five minutes; seventy five paisa per call in addition to the applicable rate of duty.

    The additional federal excise duty on mobile phone calls above five minutes shall be applicable from July 01, 2021.

  • How much a phone call will cost after new tax?

    How much a phone call will cost after new tax?

    Persons making calls through their cell phones will cost 38 percent more following the implementation of proposed change in tax rate effective from July 01, 2021.

    The government has proposed one rupee additional burden on a phone call having duration above five minutes. This was announced by Finance Minister Shaukat Tarin a day earlier at the Senate.

    In fact the finance minister announced to reduce the tax burden as compared with the actual proposals announced through the Finance Bill 2021 that was additional tax on a call having duration above three minutes.

    According to sources in telecom industry the existing call rate of duration above five minutes is Rs1.97, which also included 19.5 percent federal excise duty. However, with the implementation of proposed rates the call above five minutes will cost Rs2.72.

    The telecom industry believes the proposed changes in taxation of call rates are not possible to implement.

    Industry sources said that the proposed taxes are un-implementable as the charging structure is not linear and is based on bundle offers to facilitate prepaid users which account for 98 per cent of overall cellular subscribers in Pakistan.

    This regressive move will play havoc with the prepaid bundles being enjoyed by the lowest segment of society as the operators will be constrained to remove such offerings, making voice calling significantly more expensive.

    In addition, users will quickly learn to redial before 5 minutes to defeat this proposed levy hence it may bring nothing to the government but add to the complexity for the telecom sector and operators while causing massive inconvenience to the citizens.

  • PTA renews licenses of three cellular phone operators in AJK, Gilgit-Baltistan

    PTA renews licenses of three cellular phone operators in AJK, Gilgit-Baltistan

    ISLAMABAD: Pakistan Telecom Authority (PTA) has renewed licenses of three leading cellular mobile operators for Azad Jammu and Kashmir and Gilgit Baltistan.

    The ceremony for renewal of licenses was held in PTA headquarters, Islamabad on Thursday.

    Three Cellular Mobile Operators i.e. Telenor Pakistan, PMCL (Jazz) and PTML (Ufone) have deposited payment (50 per cent of the PTA determined license fee) amounting to Rs3.19 Billion against their license renewal fee with PTA.

    The event was attended by Federal Secretary for IT & Telecommunication, Dr. Muhammad Sohail Rajput, Chairman PTA, Major General Amir Azim Bajwa (R); Member Finance PTA, Muhammad Naveed and Member Compliance & Enforcement PTA, Dr. Khawar Siddique Khokhar; Executive Director, Frequency Allocation Board (FAB); Joint Secretary Gilgit Baltistan Council; Deputy Secretary (Finance) and Deputy Secretary (Welfare & Development) AJ&K Council and senior officers of PTA. CEOs of Telenor, Jazz and Ufone along with senior representatives of CMOs also attended the event.

    On the occasion, Chairman PTA lauded the efforts of the cellular operators for playing a crucial role in providing connectivity across these regions.

    He also appreciated the tireless efforts of concerned officials of PTA, FAB and MoIT for timely conclusion of the renewal process. He further stated that AJ&K and GB are the prime areas of tourism in Pakistan and the license renewal will pave the way for provision of 3G/4G and Next Generation Mobile Services to the consumers of these areas as well to the tourists.

    Continuous efforts are being made to bring state of the art telecommunication services to far flung areas enabling access to a multitude of opportunities for businesses, education and health.

    On this occasion Secretary IT & T, Dr. Muhammad Sohail Rajput congratulated the mobile operators on renewal of licenses. He said that AJ&K and GB have immense importance in government policies, and it is the government’s priority to provide advanced telecom services in these regions. He said that there are vast opportunities for public-private collaboration in various sectors including telecoms.

    It is pertinent to mention that due to license renewals, this will not only contribute towards uninterrupted provision of better telecom services to the people of AJ&K and GB but will also help in promotion of competition and investment in the telecom sector.

  • SBP, JazzCash sign MoU for increasing financial literacy

    SBP, JazzCash sign MoU for increasing financial literacy

    KARACHI: National Institute of Banking and Finance (NIBAF) – a subsiday of State Bank of Pakistan – and JazzCash, Pakistan’s leading FinTech Company, have signed a Memorandum of Understanding for increasing financial literacy amongst youth of Pakistan, the SBP said on Saturday.

    NIBAF and JazzCash aim to jointly promote financial literacy through the engaging and interactive game called “PomPak – Learn to Earn” developed under SBP’s project, National Financial Literacy Program for Youth (NFLP-Y).

    PomPak, utilizes a story-based narrative by following the journey of two families setting up a small entrepreneurial venture. This helps to keep the players engaged while effectively inculcating ethical behavior and financial skills such as budgeting, saving, and banking. PomPak is available in both English and Urdu for three age groups: children (9-12); adolescents (13-17); and youth (18-29).

    Anyone who completes the course is awarded a certificate of financial literacy jointly from NIBAF and NFLP-Y. It can be played on a desktop computer or can be downloaded from Google Play and the App Store for other devices.

    JazzCash, under its partnership, is going to provide SBP access to more than 26 million Pakistanis by promoting the PomPak application on its platform. This will help the application reach a wider audience, thus increasing its usage and eventually promoting financial literacy of the nation resulting in a highly positive socio-economic impact.

    Riaz Nazarali Chunara, Managing Director, NIBAF stressed on the role of increased financial literacy for promoting financial inclusion. He said that being Pakistan’s first e-learning financial literacy game, PomPak has revolutionized the way financial education is delivered. He went on to add that NIBAF is really proud of what PomPak has achieved since its launch and this partnership with JazzCash will contribute majorly towards our commitment to provide free of cost financial education to all.

    While emphasizing on the significance of the MOU, Erwan Gelebart, Chief Executive Officer JazzCash, said that there is ample scope for financial enablement and education through JazzCash.

    Creating a strong business and building a better Pakistan in parallel are key contributors of long-term success for JazzCash. This agreement will contribute in achieving the aforesaid objectives as we look forward to upskill the youngsters of Pakistan, he said.

    Under the guidance of SBP, NIBAF is implementing National Financial Literacy Program for Youth to impart essential financial education to Pakistani youth and school going children. In the last three years, the project has successfully reached more than 45 districts of Pakistan making over 750 thousands financial literate in this category.

  • Telecom sector gets relief measures in budget 2021/2022

    Telecom sector gets relief measures in budget 2021/2022

    ISLAMABAD: The telecommunication sector has received several relief measures in the federal budget 2021/2022 that will help new investment in this sector.

    According to budget commentary released by KPMG Taseer Hadi & Co. Telecommunication is one of the largest service sectors of Pakistan contributing substantial revenue in the form of taxes on telecom services and income tax on profits.

    The Finance Bill 2021 proposes several relief measures for this sector, some of them were being demanded for long, such as grant of ‘industry’ status for tax purposes.

    These measures will help to attract investment in telecom infrastructure and reduce the cost of doing business and consequential relief to the public.

    Following tax relief measures are proposed for this sector:

    —Grant of industry status which will resolve several anomalies in taxation of this sector. Also, it will make it possible for telecom companies to import plant and machinery without collection of advance tax after obtaining exemption certificate from the Commissioner.

    —Reduction in rate of withholding tax on receipts from 8% at present to 3%. As the said tax is also minimum tax, this will entail a reduction of 62.5% in effective tax rate on income for those with low profits.

    —Reduction in rate of federal excise duty on telecom services from 17 percent to 16 percent. This will however only be relevant for services rendered in Islamabad as services rendered in provinces are subject to provincial sales tax.

    —Abolition of fixed sales tax on SIM cards. However, this will not affect existing cases in litigation.

  • Budget 2021/2022: FED reduced on telecom services

    Budget 2021/2022: FED reduced on telecom services

    ISLAMABAD: The government has announced reduction in Federal Excise Duty (FED) from 17 percent to 16 percent to facilitate businesses and provide relief to the general masses.

    Finance Minister Shaukat Tarin while presenting federal budget 2021/2022 on Friday said the government had decided to reduce FED on telecom services.

    He said that to facilitate businesses and provide relief to the general masses, rate of federal excise duty on telecommunication is proposed to be reduced from 17 percent to 16 percent.

    Further, the finance minister announced withdrawal of federal excise duty on Merchant Discount Rate (MDR) charged on POS by banks, so that businesses are encouraged to carry out transactions through POS machines.