ISLAMABAD: The Overseas Investors Chamber of Commerce and Industry (OICCI) has urged the government to rationalise taxes for the telecom sector in the budget of the next financial year.
In its budget proposals, the OICCI said that the withholding tax on telecom subscribers should be abolished as majority of their base fell below the taxable limit or the withholding tax reduction made through Finance Act, 2021, should be reinstated.
It said that more than 70 per cent population lived below the poverty line and the percentage of return filers was also nominal so the implementation of withholding tax to entire subscriber’s base was not logical.
The OICCI said the reduction in withholding tax would also promote the affordability of internet and data services to the low-income group people.
It called for harmonisation of federal/provincial sales tax laws.
The federal and provincial governments have introduced distinct sales/service tax laws in their respective jurisdictions, with some of the clauses in clear conflict with each other resulting in undue hardships and harassment by the revenue collectors.
It said demanding tax on the same transactions was tantamount to double taxation.
The OICCI said there should be single sales tax rate across all jurisdictions to remove the anomalies and undue hardships being faced by the telecom sector in terms of compliances in different jurisdictions.
It opposed imposition of withholding tax on foreign suppliers against import of telecom equipment in the recent mini-budget.
The OICCI termed the advance tax on auction/renewal of licenses unjustified. This tax is liable to be collected on “sale by auction” of property.
