ISLAMABAD: The government has reduced the duty on smartphones and withholding tax on calls made from cell phones.
In his budget speech on the floor of the House, Finance Minister Ishaq Dar announced that withholding tax on cell phone calls would be reduced from 14 percent to 12.5 percent, while federal excise duty would also be reduced from 18.5 percent to 17 percent.
In order to encourage use of smartphones, customs duty would be reduced from Rs 1,000 to Rs 650, Dar said.
“Import duty is being reduced on mobile telecom products. We hope that in the same spirit the provincial government shall also reduce the rate of sales tax on mobile telephony,” he added.
He further maintained that from agricultural revolution to the industrial revolution, the world was now undergoing an information revolution, adding that it was leading to the use of information technology in every sector of human activity, be it communications, banking, trading, learning, entertainment, e-commerce, government or management.
“Just as machines have enhanced man’s mechanical power and his convenience and comfort, information technology is enhancing man’s mind/brain or intellectual power,” he said.
He said that in the future, the gap between industrialised and non-industrial countries would become less pronounced than the one between IT-enabled societies and others.
“The government of Pakistan is cognisant of this challenge and has taken a number of measures in the past, and we will continue with similar measures,” he said.
According to Dar, the government would set up an IT software park in Islamabad with the help of the Korean government with Rs 6 billion.
“The financial arrangements for this have been concluded and the construction work shall start soon. The start-up software houses shall be exempted from income tax for the first three years,” the finance minister said.
He further added that exports of IT services from Islamabad and other federal territories would be exempted from sales tax, adding that IT export houses would be allowed to open foreign exchange accounts in Pakistan on the condition that deposits in those accounts would only be allowed through remittances from abroad in respect of their export earnings. “They will be allowed to use these accounts for meeting business-related payments outside Pakistan,” he said.
