GSMA, a global organization representing the mobile industry, has recommended tax reforms to the Ministry of Information Technology (IT) in Pakistan, emphasizing their crucial role in fostering digitalization.
According to the GSMA, the current tax structure imposes a burden on digital services, with a combination of taxes including a 34.5% tax on digital services, a 15% withholding tax, and a 19.5% General Sales Tax (GST).
In light of this, the GSMA has called for a reduction in tax rates specifically targeting the telecom sector and digital services in the upcoming budget. The organization believes that lowering taxes will incentivize investment and facilitate the growth of the telecom and digital sectors in Pakistan.
Furthermore, the GSMA advocates for the implementation of a uniform sales tax rate throughout the country. This would streamline the taxation system and create a more consistent and transparent environment for businesses operating in the digital space.
Simplifying the tax system is another key aspect highlighted by the GSMA. By reducing complexities and bureaucratic hurdles, the organization believes that the ease of doing business will improve, attracting more investment in telecom and digital services.
The GSMA’s recommendations aim to create a favorable tax environment that promotes digitalization and encourages innovation in Pakistan. The Ministry of IT will now evaluate these proposals as part of their ongoing efforts to advance the digital agenda and drive technological progress in the country.
As the budget discussions continue, stakeholders and industry players await the government’s response to the GSMA’s recommendations, recognizing the significance of tax reforms in shaping the future of digital services and technology-driven sectors in Pakistan.