Senate Panel Recommends Restoration of Tax Exemptions for Telecom Sector

The Senate Standing Committee on Information Technology and Telecommunication Tuesday recommended tax exemptions to the telecom sector which were withdrawn in the mini-budget.

The committee met with Kauda Babar in the chair in Islamabad on Tuesday.

Chairman Pakistan Telecommunication Authority (PTA) Major General Amir Azeem Bajwa said that telecom operators would require to invest Rs 50 billion for up-gradation of their infrastructure to meet the upgraded quality of services benchmarks.

He further said that the operational cost of telecom companies increased due to an increase in the tax rate, depreciation of the rupee, and inflation, and resultantly their profitability declined.

“The government directly collected $2.24 billion from telecom operators on account of spectrum auction and license, besides half of it indirectly during the last two years (2019-21),” he mentioned.

Chairman PTA informed the committee the 5G spectrum auction in the country is expected by the end of the current year or in the first quarter of next year. While briefing the committee about the plan to auction spectrum, he said that the government has constituted an advisory committee headed by Finance Minister. After finalizing the plan, a consultant of international repute would be hired.

Leader of the House in Senate Dr. Shahzad Waseem said that why only one operator i.e. Ufone participated in the last auction. Chairman PTA said that it was the only operator left in the previous auction and was needed spectrum. However other operators had invested a huge amount of $1.3 billion in license renewal in 2019, besides got spectrum in earlier auctions. Further, the other operators likely have focused on the upcoming 5G auction and did not participate in the latest auction.

Chairman PTA said that the government is always engaged to facilitate telecom operators, however, the industry has some issues which have to reduce their profitability. Pakistan is still an attractive market with huge subscribers, he remarked.

The Ministry of IT sought help from the Standing Committee to restore the tax exemption. The standing committee assured cooperation and recommended tax exemptions to the telecom sector.

Senator Afnanullah Khan asked about the talks with SpaceX and Starlink. On which the Chairman PTA informed the committee that talks are underway with StarLink regarding the provision of cheap internet, however, they have to have to complete regulatory obligations. As soon as regulatory issues are settled, StarLink will launch its service, which will provide cheap internet access, especially to people living in remote areas.

The National Information Technology Board Act 2022 approved by the National Assembly was reviewed. Officials from the Ministry of Information Technology and the NITB told the committee that the purpose of the proposed bill is to make the NITB an autonomous body so that the work of the institution can be further expedited and improved by removing obstacles.

Officials said that being a subsidiary, NITB often faces financial delays, which is hurting the fast-growing sector, especially IT. Senator Dr. Shahzad Waseem, Leader of the House in the Senate, asked what would be the effect of NITB’s autonomous status and how it would benefit the country.

Responding to this, the ministry officials said that NITB has been successfully providing quality IT services to the government of Pakistan including e-office, NCOC application, and others. He further said that NITB was also working on human resource development. “Before embarking on any project, one has to go through a long process to get PSDP grants which are not suitable for a field like IT. Creating an autonomous body will eliminate unnecessary delays as well as improve the decision-making process,” he added.

The chairman of the committee directed that the proposed bill would be reviewed clause by clause in the next meeting of the committee.

The committee expressed dissatisfaction with NITB’s Track Application. The NITB had introduced a pass-track application for international travel during the Corona epidemic. Pass track application has created problems for passengers instead of convenience. Dr. Shehzad Wasim leader of the House in Senate said that he suffered for hours due to flaws in the app.

Source: Pro Pakistani