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ISLAMABAD: There might be hours long connectivity issues in the country next fiscal year subsequent to the shutdown of mobile phones if the government did not reduce customs duty on the fibre-optic cable and other taxes.
This was forewarned by the mobile operators to the government here on Friday during a meeting of the Senate Standing Committee on Finance which was chaired by Saleem Mandviwala to discuss the finance bill.
The mobile operators said that they would convey this scenario to the government as duty and taxes proposed in the budget for the next fiscal year on fibre-optic cable would result in connectivity issue, if these were not reduced.
They apprehended that that situation would result in the closure of mobile phone service for hours and ATM services might also face disruption as fibre-optic cables are critical for ensuring connectivity, stated the representatives of three major telecos including Jazz, Telenor, and Ufone while briefing the Senate Standing Committee on Finance here on Friday afternoon.
They stated that the customs duty on fibre-optic increased from 10 to 20 percent. There is additional customs duty of six percent and a regulatory duty of 10 percent. They demanded to reverse it at the rate of 10 percent.
Minister of State for Finance, Aisha Ghaus Pasha, and the FBR Chairman, Asim Ahmad, told the committee that the National Tariff Commission (NTC) increased the duty on the import of fibre-optic in order to promote local industry. The industry representatives also asked the government to reduce advance tax on the prepaid card from 15 to 10 percent.
The FBR high-ups informed the Senate panel that a new section has been added in the Income Tax Ordinance to provide data sharing mechanism with the NADRA to expand the tax net. Irregularities in the procedure for issuance of the audit report by the Commissioner have also been rectified.
The penalty for non-submission of income statement within the due date has been made more comprehensive.
The process of linking all major retailers with FBR’s POS system has been started. Penalties for sales tax evasion by not using the POS system and shutting down the system have also been imposed.
The FBR chairman said that at present the number of first-tier retailers in the country is around 30,000.
We strive to integrate them all into the FBR’s POS system as soon as possible. The Committee members opposed the imposition of withholding tax on overseas payments by credit/debit or prepaid cards and recommended amendments to the relevant section.
Secretary Railways, appearing before the Committee, recommended that the Railways be included in Schedule 5 for the import of locomotives, passenger cabins and spare parts on the analogy of the Aviation department. The committee members unanimously directed the officials of the ministry to sit down with the railways and resolve the issue.
The representatives of the Pharmaceutical Association apprised the committee of the difficulties faced by the sector.
They said that a tax has been imposed on the import of raw materials used in medicine which will lead to the decline of the industry. Minister of State for Finance Dr Pasha assured the officials of the association that their problems would be considered and resolved as soon as possible.
The representatives of the beverage industry argued that there should be no discriminatory taxation on any sector and stated that there were many items where more sugar was mixed to make their products.