Pakistan: Increased tax on internet, mobile stifles digital growth
Feb 12, 2022
Islamabad [Pakistan], February 12 : Increased internet connection taxes in Pakistan by the Imran Khan government are expected to hurt the poorest, stifle digital growth and limit Pakistanis in an increasingly competitive digital world.
The country saw a hike in taxes on mobile connection and the internet by 50 per cent and also the price of advanced mobile phone sets through the mini-budget passed by the Imran Khan government in response to International Monetary Fund (IMF) demands in order to qualify for a loan from the Fund, reported Dawn.
In January, the Finance (Supplementary Act) 2022 also known as mini-budget was approved by raising PKR 350 billion from largely impoverished residents through indirect taxes on telecom services and the removal of GST exemptions.
Usama Khilji, writer and director of Bolo Bhi, an advocacy forum for digital rights, while writing for Dawn says that the Indirect taxes are regressive because the poor pay a far higher percentage of their income than the rich, for whom a little tax increase is insignificant.
In addition, the tax on high-end mobile phones has risen significantly. The already hefty taxes on imported phones with modern technology and the latest features have been doubled this year.
Women and girls are disproportionately affected by such taxes compared to men and boys. Pakistan has the region's largest gender digital divide.
Pakistanis are already struggling with the rising inflation and Pakistan's National Electric Power Regulatory Authority (NEPRA) has also increased power tariff by PKR 3.09 per unit on Saturday, according to a notification released by the authority.
Khilji urged that such regressive taxes must be cut immediately if the government is serious about helping the poor. The poor's hard labour should not be used to pay for elite advantages, and they should be encouraged to network, says the writer.
