STAFF REPOERT ISLAMABABAD: The recently tabled financial budget for the year 2011-12 has not proposed any changes in the existing tax rate on telecom services.This means that General Sales Tax, Federal Excide Duty and activation tax will remain un-changed for telecom services in the country.On other hands, cellular industry had proposed to rationalize the taxes on telecom services, while telecom subscribers pay highest rate of tax amongst all sectors, locally and regionally.
According to sources, the Federal Bureau of Revenue had not proposed any amendment in the First Schedule of the Federal Excise Act 2005 and Sales Tax Act 1990 for change in the rate of the FED on telecom services. The rate of the tax on the telecom sector would remain unchanged during next fiscal 2011-2012.
According to the budget draft, the Sixth Schedule of the Sales Tax Act has been proposed to be amended to withdraw exemptions, but there is no specific proposal relating to the cellular companies or telecom sector.In the budget, the Federal Excise Duty was proposed on short message service (SMS) @ 20 paisa per SMS message by amendment in Table II of First Schedule to the Federal Excise Act, 2005. The proposal was later withdrawn through amendment in the Finance Bill 2009.
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