SRB issues updated sales tax rate of 19.5% on telecom services

SRB issues updated sales tax rate of 19.5% on telecom services

KARACHI: The Sindh Revenue Board (SRB) on Monday notified updated sales tax rate of 19.5% on telecommunication services.

The board issued an updated working tariff on April 15, 2023, to facilitate taxpayers, and according to the working tariff, the sales tax rate shall be 19.5% on services provided by telecommunication companies.

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The updated tax rate will be applicable to a wide range of telecommunication services, including fixed-line voice telephone services, wireless telephones, cellular telephones, wireless local loop telephones, video telephones, payphone cards, prepaid calling cards, voice mail services, messaging services, short message services (SMS), multimedia message services (MMS), and more.

The list also includes internet services, including email services, dial-up internet services, broadband services for DSL connection, internet/email/data/SMS/MMS services on WLL networks, internet/email/data/SMS/MMS services on cellular mobile networks, data communication network services (DCNS), value-added data services, virtual private network services (VPN), and other specified telecommunication services.

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The application of the updated tax rate by the SRB is an attempt to generate revenue for the government and is part of the overall strategy to increase tax collection in the country. The telecommunications industry in Pakistan is one of the fastest-growing sectors, and with the increase in the use of telecommunication services, the government aims to tap into this potential source of revenue.

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While the tax rate may be a source of concern for telecommunication companies, it is important to note that the taxes collected by the government are used to fund various public welfare projects, such as healthcare, education, and infrastructure development.

Furthermore, the government has also taken measures to reduce the burden of taxes on small businesses and low-income individuals, which should help alleviate the impact of the new tax rate.

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Overall, the move by the SRB to notify a sales tax rate on telecommunication services is a step towards enhancing the tax collection system in Pakistan and improving the economy of the country.

In conclusion, the Sindh Revenue Board’s notification of a sales tax rate on telecommunication services is a significant development in the telecommunication industry in Pakistan. While it may have implications for telecommunication companies, the revenue generated from these taxes will be used to fund public welfare projects and support the country’s economic development.