Government of Pakistan Announces Slight Cut in Taxes on Telecom Sector
- Budget 2014-15
Government of Pakistan Announces Slight Cut in Taxes on Telecom Sector in Pakistan.These taxes are implemented by govt of pakistan on telecom sector company.
Just in case if you don’t remember, after National Finance Commission (NFC) Award, Sindh, KPK and Punjab collect GST on provincial levels. Hence FED will be renamed to GST in these provinces.
However, In Capital (Islamabad), Balochistan and GB areas, these taxes are still called FED and hence a tax reduction of 1 percent is proposed for customers in Islamabad, Balochistan and GB areas.
Three provinces may also announce to collect 18.5 percent GST – instead of current 19.5 percent — on telecom services to match tax rate of federal capital, Balochistan and GB. But that will be announced during provincial budgets.
Things to Note:
For those who are unable to understand the technical language and complications from above, there is a reduction of 2 percent in taxes on telecom services.
- 1 percent tax is reduced for WHT, which will now be 14 percent
- 1 percent tax is reduced for GST/FED, which will now be 18.5 percent.
- These tax rates, if approved by the house, will be applicable from July 1st, 2014.
Taxes on Telecom Services Explained
After 1% reduction in withholding tax and 1% reduction in GST/FED, total taxes on telecom services will be 32.5 percent, down from 34.5 percent.
Following is the complete detail of taxes on Telecom services:
- Withholding Tax: 14 Percent
- FED/GST: 18.5 Percent
- Total Taxes: 32.5 percent
Just to add to the misery, all cellular companies are charging around 12 percent services charges. After these charges, total money deducted from cellular services:
- Taxes: 32.5 Percent
- Service Charges: 8 Percent (for prepaid only)
- Total Deduction: 40.5 percent
In simple words, Rs. 59.5 out of Rs. 100 will be be available for airtime usage
Government of Pakistan Announces Slight Cut in Taxes on Telecom Sector by>>Rose.
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