Cellular service providers strongly oppose tax on voice calls above 5 minutes



ISLAMABAD   –  The representatives of cellular service providers on Monday expressed grave concerns over levying tax on voice calls above 5 minutes, as it would put more financial burden on the consumers besides affecting the business of telcos.

A delegation of the representatives of cellular service providers visited Islamabad Chamber of Commerce and Industry and had a meeting with Sardar Yasir Ilyas Khan, President ICCI. They expressed grave concerns over the levy of 75 paisas tax on voice calls above 5 minutes duration in Budget 2021-22 as it was an anti-poor tax and would increase the cost of 5 minutes call from current Rs.1.97 to Rs.2.72 putting more financial burden on the consumers besides affecting the business of telcos. They strongly demanded that the government should immediately withdraw this tax to save the telcos and the consumers from further troubles. 

Asif Aziz, Chief Commercial Officer Jazz, Naveed Khalid Butt, Group Chief Regulatory Officer Ufone, Bilal Khan, Deputy Director Financial Control Zong, Bilal Maroof from Telenor and others were in the delegation. Fatma Azim, Senior Vice President, Abdul Rehman Khan, Vice President, Ejaz Abbasi, former president ICCI, were also present at the occasion.

The delegation members said that the tax has been imposed without consulting the stakeholders. They said the proposed tax is not implementable as the charging structure is not linear and is based on bundle offers to facilitate the prepaid users which account for 98% of overall cellular subscribers in Pakistan. They said that this regressive tax will play havoc with the prepaid bundles being enjoyed by the lowest segment of society. They said that the voice and hybrid bundles will have to be withdrawn to implement this regressive tax and the existing telecom service model will be seriously hampered. They said that such usage based taxes have not been implemented so far and it is nearly next to impossible to implement these changes in existing billing systems of telcos. Therefore, they stressed that the government should immediately withdraw the proposed tax to save the economy from its negative impact.

Addressing the delegation, Sardar Yasir Ilyas Khan, President ICCI, said that the current government was determined to promote digital economy, but such anti-poor taxes would create hurdles in realizing such cherished goals. He said that the move is totally unprecedented regionally or globally, and will make the poor mobile users pay for the tax gaps. He said that the hardest hit will be the lowest segment of the society, who can’t afford to make WhatsApp calls. He said that currently, close to 85 million Pakistanis are using 2G enabled feature phones and have no access to the Internet. He said that the users will quickly learn to redial before 5 minutes to avoid the charge of proposed levy hence it may bring nothing to the government but add to the complexity for the telecom sector and operators besides causing massive inconvenience to the telecom users. He said that there would be severe backlash from the telecom users, urging the government to urgently reassess the decision and withdraw it. He hoped that remaining true to its mandate of facilitating the poor, the government will review this regressive move and withdraw this tax in the larger interest of telecom service users.