Jawwad Rizvi

Media Category: Print
Media Organization: The News

I have been working in the print media for almost a decade in Pakistan covering the economic, socio –economic, governance, corporate sector, political economy, agriculture sector.
Former president of Lahore Economic Journalists Association (LEJA) a platform of economic journalist based in Lahore.

Nominated Work

Title: Tax hike to affect 3G auctioning

Increase in Govt taxes on Telecom sector negatively impact on long awaited 3G spectrum auction.

LAHORE: The five percent increase in withholding tax on cellular users will negatively affect the government’s plan of third generation (3G) auction, said industry officials. Besides, this along with the seven percent service charge will leave a mobile user loading a prepaid mobile card of Rs100 with only Rs58.5 credit to call, they said. The government has recently raised withholding tax from 10 to 15 percent on cellular users. Cellular service providers also levy seven percent as service charges.Aggregately, a prepaid card of Rs100 is taxed with 34.5 percent taxes, or Rs34.5. Moreover, the government also charges 19.5 percent federal excise duty on airtime used by mobile users, according to the industry officials. Actually, total 41.5 percent, or Rs41.5, is deducted from Rs100 prepaid card, they said. The service charge covers return on investment and operation and maintenance cost spent by a cellular service provider. An official belonging to a cellular service operator said the hike in withholding tax will hamper the investment in the telecommunication sector. The new government has shown its commitment to auction 3G licences and factored in the budgetary estimates the funds to be generated from the auctioning. The federal budget 2014 projected more than Rs100 billion foreign exchange inflows due to the 3G auction. However, the tax hike can affect the 3G auction process, he said, adding that the government has not signaled positively to the telecom sector. It [telecom] is already the highest tax paying sector and the government has further burdened it instead of bringing the new sectors into the tax net, he lamented. A senior retired official from the Federal Board of Revenue (FBR) Hussain Ahmed Sherazi, currently working as tax consultant, said a cell phone has nowadays become a necessity. Nearly half of cellular users in Pakistan are living below the poverty line, he said, adding, “the government has taxed such segment of the society.” A driver, office boy, housemaid, and other people coming in the category of a group drawing Rs8,000 salary per month spend an average Rs500 monthly on mobile phone usage. The growing cost of telecommunication deprives them of interaction. Sherazi said the government has taken measures for easy tax generation and given relaxation to the rich people.

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