Karachi, February 9, 2024 – The Sindh province has reported a significant collection of Rs. 14.88 billion as sales tax on telecom services during the fiscal year 2022-23, according to official data released on Friday.
The Sindh Revenue Board (SRB), the provincial tax collecting agency, highlighted the telecom sector’s consistent contribution, maintaining its position as the second-largest revenue-generating sector.
The telecom sector demonstrated a 2% growth compared to the previous fiscal year, contributing Rs. 14.88 billion during FY 2022-23, up from Rs. 14.59 billion in the previous period. The steady increase in revenue underscores the ongoing importance of the telecom sector in Sindh’s economic landscape.
Various telecom services fall under the purview of sales tax, including bandwidth services, telegraph, internet, data communication, network services, value-added data services, audio text services, vehicle and other tracking services, alarm services, and international incoming calls services. These services are subject to sales tax under tariff heading 98.12 of the Second Schedule, encompassing 68 tariff sub-headings in the 2011-Act. The statutory tax rate applicable to these services is set at 19.5%.
It is important to note that certain exemptions apply to telecommunication services related to charges payable on international leased lines or bandwidth services used by software exporting firms registered with the Pakistan Software Export Board. These exemptions aim to foster the growth of the software export industry.
The report from the SRB provides insights into the economic vitality of the telecom sector in Sindh, showcasing its resilience and capacity for continued growth. The revenue generated from sales tax on telecom services contributes significantly to the provincial coffers, enabling the government to fund essential services and development initiatives.
As the telecom sector evolves with technological advancements and increasing demand for digital services, its role in the provincial economy is expected to become even more pronounced. Policymakers and industry stakeholders will likely continue to monitor trends and regulations to ensure a conducive environment for the sector’s sustained growth.
The SRB’s commitment to transparent reporting and data dissemination allows for informed decision-making by both authorities and businesses. The telecom sector’s ability to weather challenges and contribute substantially to the province’s revenue underscores its importance in driving economic progress and innovation in Sindh.
