Minister of State for IT Anusha Rehman has assured the IT companies that the imposition of 14 per cent advance income tax (AIT) on internet will be withdrawn while she sought recommendations from the companies for elimination of 8 percent turnover tax on the IT services companies.
A delegation of Pakistan Software Houses Association (PASHA) and Internet Service Providers Association of Pakistan (ISPAK) met with Anusha Rehman and discussed the taxation issues with her.
ISPAK President Wahaj-us-Siraj told Pakistan Today that the minister assured the delegation that the matter of 14 per cent AIT on internet will be taken up with the ministry of finance and Federal Board of Revenue. She was of the opinion that the imposition of AIT would impact the progress of internet and knowledge economy in the country. She assured that the ministry of IT and telecom would take all efforts to withdraw the AIT on internet usage.
At present internet users are charged 14 per cent AIT by the federal government and 19 per cent excise duty is imposed by the provinces. This adds up close to Rs 350 per Rs 1,000 usage by the consumers.
The minister said that 8 per cent turnover tax on IT services companies could not be withdrawn as it was imposed on all of the services sector companies. She asked the delegation to bring some solid suggestions for its removal so that the matter could be taken up with the Finance Ministry and FBR.
Broadband penetration in Pakistan stood at 6.1 per cent at end December 2014 as compared to 1.7 per cent at end December 2013. The total number of broadband users increased from 3.8 million in December 2013 to 11.4 million in December 2014. The major reason for growth is the advent of 3G and 4G operations of cellular companies.
