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Category: IT & Telecom

IT & Telecom news covering technology trends, digital innovation, telecom updates, software, hardware, and the latest developments in the tech industry.

  • SRB issues sales tax rate on telecom services

    SRB issues sales tax rate on telecom services

    KARACHI: Sindh Revenue Board (SRB) on Tuesday updated working tariff up to November 01, 2020 for levy of sales tax on telecommunication services.

    The sales tax on services are exempt on telecommunication services involving charges payable on the international leased lines or bandwidth services used by the software exporting firms registered with the Pakistan Software Export Board.

    Following is the table for the application of sales tax on telecommunication services along with tariff headings:

    9812.1000Telephone services19.5%
    9812.1100Fixed line voice telephone service19.5%
    9812.1200Wireless telephone19.5%
    9812.1210Cellular telephone19.5%
    9812.1220Wireless Local Loop telephone19.5%
    9812.1300Video telephone19.5%
    9812.1400Payphone cards19.5%
    9812.1500Prepaid calling cards19.5%
    9812.1600Voice mail service19.5%
    9812.1700Messaging service19.5%
    9812.1710Short Message service (SMS)19.5%
    9812.1720Multimedia message service (MMS)19.5%
    9812.1910Shifting of telephone connection19.5%
    9812.1920Installation of telephone19.5%
    9812.1930Provision of telephone extension19.5%
    9812.1940Changing of telephone connection19.5%
    9812.1950Conversion of NWD connection to non NWD or vice versa19.5%
    9812.1960Cost of telephone set19.5%
    9812.1970Restoration of telephone connection19.5%
    9812.1990Others19.5%
    9812.2000Bandwidth services19.5%
    9812.2100Copper line based19.5%
    9812.2200Fibre-optic based19.5%
    9812.2300Co-axial cable based19.5%
    9812.2400Microwave based19.5%
    9812.2500Satellite based19.5%
    9812.2900Others19.5%
    9812.3000Telegraph19.5%
    9812.4000Telex19.5%
    9812.5000Telefax19.5%
    9812.5010Store and forward fax services19.5%
    9812.5090Others19.5%
    9812.6000Internet services19.5%
    9812.6100Internet services including email services19.5%
    9812.6110Dial-up internet services19.5%
    9812.6120Broadband services for DSL connection19.5%
    9812.6121Copper line based19.5%
    9812.6122Fibre-optic based19.5%
    9812.6123Co-axial cable based19.5%
    9812.6124Wireless based19.5%
    9812.6125Satellite based19.5%
    9812.6129Others19.5%
    9812.6130Internet/email/Data/SMS/MMS services on WLL networks19.5%
    9812.6140Internet/email/Data/SMS/MMS services on cellular mobile networks19.5%
    9812.6190Others19.5%
    9812.6200Data Communication Network services (DCNS)19.5%
    9812.6210Copper Line based19.5%
    9812.6220Co-axial cable based19.5%
    9812.6230Fibre-optic based19.5%
    9812.6240Wireless/Radio based19.5%
    9812.6250Satellite based19.5%
    9812.6290Others19.5%
    9812.6300Value added data services19.5%
    9812.6310Virtual private Network services (VPN)19.5%
    9812.6320Digital Signature service19.5%
    9812.6390Others19.5%
    1[9812.7000Other specified telecommunication services19.5%
    9812.7100Audio Text Services19.5%
    9812.7200Teletext services19.5%
    9812.7300Trunk radio services19.5%
    9812.7400Paging services including voice paging services and radio paging services19.5%
    9812.7900Others19.5%
    9812.8000Tracking and alarm service19.5%
    9812.8100Vehicle tracking and other tracking services19.5%
    9812.8200Burglar and security alarm services19.5%
    9812.8900Others19.5%
    9812.9000Telecommunication services not elsewhere specified]19.5%
  • Income tax rates on telephone, internet usage

    Income tax rates on telephone, internet usage

    ISLAMABAD: Federal Board of Revenue (FBR) has updated rates of income tax on usage of telephone and internet services by phone subscribers during tax year 2021 (July 30, 202 to June 30, 2021).

    The FBR issued Income Tax Ordinance, 2001 (updated June 30, 2020) after incorporating amendments brought through Finance Act, 2020.

    The FBR also updated following rates of collection of tax under section 236 of the Income Tax Ordinance, —

    (a)In the case of a telephone subscriber (other than mobile phone subscriber) where the amount of monthly bills exceeds Rs100010 percent of the exceeding amount of bill
    (b)In the case of subscriber of internet, mobile telephone and pre-paid internet or telephone card12.5 percent of the amount of bill or sales price of internet pre-paid card or prepaid telephone card or sale of units through any electronic medium or whatever form.

    Following is the text of Section 236 of Income Tax Ordinance, 2001:

    236. Telephone and internet users.- (1) Advance tax at the rates specified in Part IV of the First Schedule shall be collected on the amount of –

    (a) telephone bill of a subscriber;

    (b) prepaid cards for telephones;

    (c) sale of units through any electronic medium or whatever form; and

    (d) internet bill of a subscriber; and

    (e) prepaid cards for internet.

    (2) The person preparing the telephone or internet bill shall charge advance tax under sub-section (1) in the manner telephone or internet charges are charged.

    (3) The person issuing or selling prepaid cards for telephones or internet shall collect advance tax under sub-section (1) from the purchasers at the time of issuance or sale of cards.

    (3A) The person issuing or selling units through any electronic medium or whatever form shall collect advance tax under sub-section (1) from the purchaser at the time of issuance of sale of units.

    (4) Advance tax under this section shall not be collected from Government, a foreign diplomat, a diplomatic mission in Pakistan, or a person who produces a certificate from the Commissioner that his income during the tax year is exempt from tax.

  • Mobilink terms FBR recovery action as unfortunate

    Mobilink terms FBR recovery action as unfortunate

    ISLAMABAD: A spokesman of Jazz (Mobilink) on Thursday said that the treatment of the Federal Board of Revenue (FBR) for the recovery of disputed amount through sealing the office was unfortunate.

    “Despite being the largest taxpayers, we are treated in an unfortunate way,” a company spokesman said.

    “While the government is making efforts to improve the business environment in the country, such drastic measures would unfortunately severely affect investment prospects,” the spokesman said in a statement.

    “We have received a notice from FBR yesterday for the recovery of a disputed tax demand and we have serious reservations on these alleged taxes.

    “The proceedings were carried out on plea of a tax recovery notice for a disputed amount from 2018 which is under legal proceedings.

    “Due to the drastic measures our corporate reputation and pride has been hurt and shakes the confidence of foreign investors of Jazz and others.

    “Despite being the largest taxpayers, we are treated in an unfortunate way.

    “While the government is making efforts to improve the business environment in the country, such drastic measures would unfortunately severely affect investment prospects,” the spokesman said.

    Jazz seeks resolution of the matter and has always been willing to conduct dialogue as well as rightful legal course to reach merit and right interpretation.

    “Jazz also assures its valued customers that despite the challenges, we will continue to provide uninterrupted services,” the statement said.

    Mobilink is Pakistan’s number one 4G operator and the largest internet and broadband service provider is amongst the largest taxpayers and the biggest foreign investors with an investment of over US$ 9.5 billion during the last 25 years.

    In the last 6 years alone, Jazz has contributed over Rs251 billion to the national exchequer in the form of taxes and duties.

    Jazz has always been a law-abiding corporate citizen and has been in the forefront for contributing to Pakistan’s economy in monetary and development terms, and as the market leader in telecom and internet services with over 63 million customers.

    The company has also discharged its social responsibility in floods, earthquakes, and recently in COVID-19 relief response worth over Rs1.2 billion.

  • OICCI expresses dismay over FBR action against mobile operator

    OICCI expresses dismay over FBR action against mobile operator

    KARACHI: Overseas Investors Chamber of Commerce and Industry (OICCI) on Thursday expressed its shock and dismay over action taken by the tax authorities against Pakistan’s leading mobile operator.

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  • FBR initiates Rs25 billion tax recovery from Mobilink

    FBR initiates Rs25 billion tax recovery from Mobilink

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday initiated tax recovery of Rs25 billion from M/s. Pakistan Mobile Communication Limited (PMCL), including sealing of business premises.

    PMCL is a mobile operator in Pakistan operating with trade name of Mobilink.

    Large Taxpayers Office (LTO) Islamabad, one of the major revenue collecting units of the FBR, took the action against the mobile operator as income tax amount Rs25.39 billion was outstanding against the defaulter. “The defaulter is refraining itself deliberately, dishonestly and without lawful excuse to discharge tax liability and thus causing huge loss to the national exchequer,” according to a notice of LTO Islamabad.

    The tax office had given deadline till 1300 hours on October 28, 2020 to pay the outstanding amount.

    The tax office had initiated the recovery proceedings for the said amount by one or more of the following modes, namely:

    — Attachment and sale of moveable or immovable property;

    — Appointment of receiver for the management of your moveable or immovable property;

    — Arrest and detention in person for a period not exceeding six months.

    — As specified under clasue (a), (ca) and (d) of sub-section (I) of section 48 of the Sales Tax Act, 1990.

    The FBR notice said that an amount of Rs22.03 billion was outstanding against the mobile operator related to tax year 2018. Further an amount of default surcharge of Rs3.36 billion to total outstanding amount.

    While responding to the report, the PMCL issued the following statement:

    “Jazz is a law-abiding and responsible corporate citizen. Our contribution to Pakistan’s economy over the past 25 years is significant.

    “We have received a notice from FBR this afternoon. Jazz has made tax submissions based on legal interpretations of the tax owed. We will review and take measures under our legal obligations and will collaborate with all concerned institutions for an early resolution of this issue.”

  • Contracts worth Rs5.11 billion awarded for next generation broadband

    Contracts worth Rs5.11 billion awarded for next generation broadband

    ISLAMABAD: The Universal Service Fund (USF) on Monday approved award of contracts to Telenor, Zong, Ufone and PTCL worth Rs5.11 billion through the Next Generation Broadband for Sustainable Development program and the Next Generation Optical Fiber Network and Services program.

    Federal Secretary Ministry of IT and Telecommunication Shoaib Ahmad Siddiqui chaired 74th Board of Directors meeting of Universal Service Fund (USF) on Monday.

    PTCL is being awarded the contract of Kashmore, Ghotki, Sukkur and Khairpur districts in the province of Sindh.

    The Next Generation Optical Fiber Network and Services projects worth approximately Rs3 billion is aimed at laying of 1078 km of Optical Fiber Cable to connect 140 villages and union councils thereby providing high speed mobile broadband services to an unserved population of approximately 4.7 million.

    Moreover, the Board also approved award of contracts under the Next Generation Broadband for Sustainable Development Program worth Rs2 billion to Telenor, Zong and Ufone.

    Telenor is being awarded the contract of Chitral, Upper Dir and Lower Dir districts in the province Khyber Pakhtunkhwa whereby an unserved population of around 0.7 million will benefit from high speed mobile broadband services in 648 unserved villages and an approximate unserved area of 18,212 sq. km.

    Likewise, Zong is being awarded the contract of Karachi West and Malir districts in the province of Sindh that will benefit an unserved population of approximately 0.1 million in 36 unserved villages and approximately 690 sq. km of unserved area.

    Similarly, Ufone is being awarded the contract of Mastung and Ziarat districts in the province of Balochistan to serve an unserved population of approximately 0.1 million in 226 unserved villages and an approximate unserved area of 6,324 sq. km.

    During the meeting, Federal Secretary Ministry of IT and Telecommunication, Shoaib Ahmad Siddiqui said that as advised by the Federal Minister for IT and Telecommunication, Syed Amin Ul Haque, the basic purpose of these projects is not only to promote tourism infrastructure of the country but also to connect rural population with the digital world.

    He also said that the Ministry of IT and Telecommunication is leaving no stone unturned to provide broadband services to every Pakistani and accomplish Digital Pakistan vision; therefore, people should remain hopeful that such development interventions will reach them soon as well.

    Earlier, the Chief Executive Officer of USF, Haaris Mahmood Chaudhary briefed the Board members about the projects. He thanked the Federal Minister, Syed Amin Ul Haque, the Federal Secretary and Chairman of USF Board, Shoaib Ahmad Siddiqui and the Board members for entrusting him. He stated that USF ensures merit, transparency and timely completion of projects.

    Furthermore, he added that USF’s contribution to Digital Pakistan vision remains distinguished. Other board members comprising Maj. Gen (R) Amir Azeem Bajwa, Chairman PTA; Shabahat Ali Shah, CEO-NITB; Irfan Wahab, CEO-Telenor Pakistan; Imran Akhtar Shah, VP for Government Sales, Super Net Pvt Ltd and Nominee of Data Licensees; Rashid Khan, CEO-PTCL and Nominee of Fixed Line Operators; Kaukab Iqbal, Chairman-Consumer Association of Pakistan and Nominee of Consumer Group; Muhamad Omar Malik, Member- Telecom and management of USF Co. also attended the meeting.

  • Import of mobile phones allowed Rs23.15 billion as tax concession

    Import of mobile phones allowed Rs23.15 billion as tax concession

    ISLAMABAD: Federal Board of Revenue (FBR) issued details of sales tax concessions to the tune of Rs23.15 billion granted on import mobile phones.

    The FBR issued the cost of allowing reduced rate of sales tax on the import of cellular phones during fiscal year 2020.

    FBR sources said that the beneficiaries of sales tax concessions were importer and general public.

    Following table explains head wise cost of sales tax concession on import different type of mobile phones;

    S. No.Value of mobile phonesSales tax concession
    1Cellular mobile phones (not exceeding US$ 30)Rs2,424 million
    2Cellular mobile phones (exceeding US$ 30 but not exceeding US$ 100)Rs 10,032 million
    3Cellular mobile phones (exceeding US$ 100 but not exceeding US$ 200)Rs5,764 million
    4Cellular mobile phones (exceeding US$ 200 but not exceeding US$ 350)Rs 1,239 million
    5Cellular mobile phones (exceeding US$ 350 but not exceeding US$ 500)Rs 56 million
    6Cellular mobile phones (Exceeding US$ 500)Rs 731 million
    7Cellular mobile phones (PTA – DIRBS)Rs2,908 million
  • Mobile phone imports jump up 94 percent in July – September

    Mobile phone imports jump up 94 percent in July – September

    Pakistan’s mobile phone imports witnessed a significant surge of 94 percent during the first quarter (July–September) of the fiscal year 2020/2021, according to figures released by the Pakistan Bureau of Statistics (PBS) on Saturday. The country imported mobile phones worth Rs82 billion in this period, a sharp rise from the Rs42 billion recorded in the same quarter of the previous fiscal year.

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  • IT Ministry, Microsoft to explore investment avenues

    IT Ministry, Microsoft to explore investment avenues

    ISLAMABAD: The ministry of Information Technology and Microsoft to explore avenues for investment in Pakistan to support employment generation.

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  • Mobile phone operators deduct only applicable tax rates: PTA

    Mobile phone operators deduct only applicable tax rates: PTA

    ISLAMABAD: Pakistan Telecommunication Authority (PTA) on Friday said that the Cellular Mobile Operators (CMOs) are deducting only applicable rates of taxes after the restoration of levies by Supreme Court of Pakistan.

    In a statement, with reference to taxes applied on the recharge/reload of prepaid balance, the PTA said that the CMOs are deducting only withholding tax and general sales tax/federal excise duty on the prepaid recharge/reload after restoration of taxes by the Supreme Court of Pakistan from April 2019.

    The PTA said that on the recharge of Rs200 balance provided to the user is Rs177.778 (and not Rs152 as reported on the social media) after deduction of Rs22.22 against withholding tax at 12.5 percent.

    General Sales Tax at 19.5 percent is applied on per call, SMS, data usage basis or opting for any additional bundle/package.

    “When a user consumes its remaining balance of Rs177.778, a total of Rs29.01 as GST is charged,” the PTA said.

    In the same way, if a package is priced at Rs167 (without GST), the same, requires a prepaid balance of Rs199.56 (Price+GST=Rs167+Rs32.56). Due to lack of clarity on the deduction of GST in addition to withholding tax, mobile subscribers are assuming that CMOs are charging well above applicable taxes, which is not correct, the PTA said.

    The PTA further said that it had fixed a ceiling on call setup charges at Re 0.15 per call. PTA is vigilant about the rates/tariffs being charged by CMOs and action will be initiated on any reported incidence of charging above the published tariffs and applicable taxes in accordance with the law, it added.