Pakistan Government proposed an additional call tax on phone calls exceeding 5-minutes time. From 1st July onwards, the new rate would be 0.75 PKR tax per minute after 5 minutes of the call. Finance Minister Shaukat Tarin announced it as a part of tax relief measures in Budget 2021-2022 on Friday, 25th July in the National Assembly. While withdrawing and reducing some of the other taxes, the government increased the tax in the telecom sector.
Experts have weighed in that this proposal is bogus and will only put more burden on the lowest class of society. On Sunday, 27th June Pakistan People’s Party (PPP) from the opposition demanded the finance minister to reverse this decision. There has been a lot of unrest among the poor and labor community since the announcement.
How Much Tax on Mobile Phone Calls there will Be?
Currently, on every mobile phone call tax in Pakistan, there is a 0.33 PKR tax per minute. It means that users currently pay 1.65 PKR to telecom operators when their call lasts for 5 minutes or longer. In addition, the government had imposed 19.5% Federal Excise Duty (FED) on mobile phone calls.
Now the FED also includes this new 0.75 PKR per minute tax. The rate will remain 0.33 PKR per minute but become 0.75 per minute when calls exceed 5 minutes. It means that the cost of a longer call would be 2.72 per minute, which is a 38% increase than before. In short, voice call users would have to pay 65% call tax for calls that last longer than 5-minutes.
Reportedly, there is no new tax on internet or SMS services. It comes off as a doubtful move when PTI’s government had aimed to improve the lives of the poor in Pakistan. Experts opined that this decision is exactly the opposite of improving anyone’s condition.
Poor Community Likely to Suffer
Even though smartphone dominance is visible in various societies, many Pakistani populations still use a classic phone with no internet. The main purpose of the labor community is to reach out to their contacts. Some of their conversations last for hours, just like a rich person’s desire to watch Netflix. The public is annoyed after the government failed to see the biggest issue for the lower class while claiming to be working for them.
Therefore, the move is discriminatory for the poor while favoring the elite class and large corporations. This new call tax on phone calls would also intensify the horror for those users who call banks, telecom helplines, and other UANs only to be put on hold. The longer the user stays on hold, the more call tax revenue it will generate.
Not Everyone is a Broadband User
The charging structure of the telecom sector is not linear and it is based on different bundles and offers. 98% of all telecom subscribers in Pakistan are pre-paid users, for which the operators would have to renew their offerings as the calls have become significantly expensive. Users can obviously work around this by cutting the call at 4:59 and then calling again for saving extra call tax. This will make the telecom sector further questionable as the eco-system of voice and broadband would have no meaning. It is because a wrong move in one telecom area affects the entire technology.
According to the records, there are 183 million subscribers in Pakistan out of which 98 million have broadband while 85 million only use the basic voice call features. Most of them belong to the low class that usually make longer calls. They are endangered to face the worst challenges of this additional tax on phone calls in staying connected with their families in villages.