Former Chairman Board of Investment (BoI) Muhammad Azfar Ahsan said on Thursday that Telecommunications industry plays crucial and integral role to boost country economy but heavily taxed in the world with GST at 19.5 percent additional withholding tax at 15 percent and corporate tax at 34 percent are major barrier to rise of this industry
He said in a statement that the country needs to practically acknowledge the pivotal role of Telecom, especially just before the announcement of the budget, adding that these barriers adversely impacted the entire trajectory of the digitization of the economy and IT-related exports. “It is important to bring this issue to light and have the stakeholders deliberate on the sheer importance of what needs to be done and how,” he suggested. Ahsan elaborated on how heavy taxation is hampering growth not only for the Telecom sector but also for Digital, IT, and other related industries. “The future job market is in technologies, including Artificial Intelligence (AI) and Machine Learning (ML), and the Telecom sector provides the most effective infrastructure.”
After the US, UK, and Brazil, Pakistan is the 4th largest nation in the world contributing to the IT freelancing segment with an encouraging USD 2 billion in the exporter’s club, and Telecom is the vehicle for the route to the membership of billion dollar exporters club. “Pakistan has about 60% of its population in the 15-29 age group, representing enormous human and knowledge capital. With more than 2,000 IT companies and call centers, 300,000 English-speaking IT professionals with expertise in current and emerging IT products and technologies, 13 Software Technology Parks, and around 20,000 annual IT graduates and engineers, the country’s statistics beg the question: why, pray tell, a meager USD 2 billion of IT exports?”
Pakistan has 5 main players in the Telecommunications industry; together, they have brought ease to the people and growth to businesses, in addition to creating massive employment opportunities, thereby enabling a significant proportion of the population to become worthy contributors to a developing economy. Azfar’s focus, therefore, is on the need for a long-term policy framework, facilitation for investors, and incentives that can lead to ‘4G for all.’ The former Chairman BoI concluded on a rather somber note, that Telecommunications is an integrated and enabling industry, and its decline or collapse will not be an isolated event. It will create a domino effect that may sink many others. Immediate facilitation by the Government of Pakistan, along with a long-term policy framework, will stabilize the Telecom sector and contribute to the overall economic infrastructure of the country. Pakistan has an opportunity to become the hub of IT and Digital industry exports for this it needs consistent, reliable, strong, and affordable Telecom services. Government must review its taxation policy for the Telecom industry.
