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Pakistan’s high taxes on mobiles could widen digital divide

Concerns rise in Pakistan as taxes on mobiles increase

As Pakistan increased taxes on imported mobile phones, as part of the International Monetary Fund (IMF) diktat before it seeks a financial bailout package from the multilateral agency, the Global System for Mobile Communications Association (GSMA), which represents mobile operators across the world, has expressed concern over the move saying that this could derail digitization in the country.

The London-based association, facilitating countries to transition towards a more comprehensive digital eco system, has urged Islamabad to review the decision.

In the recently passed Supplementary Finance Budget, the Imran Khan government increased taxes on all imported phones. According to the amendment approved by the parliament on January 15, the newly imposed tax would lead to the price hike of approximately 30 percent on the original price, Digital Rights Monitor said.

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According to Pakistan based news organization, the News International, GSMA in a letter to the country’s Federal Minister for Finance Shaukat Tarin, Federal Minister for IT Aminul Haq, Federal Board of Revenue (FBR) Chairman Dr Muhammad Ashfaq Ahmed and Pakistan Telecommunication Authority (PTA) Chairman Amir Azeem Bajwa said that the increase in taxes on telecom services and mobile phones would affect Pakistan’s economy. “The telecommunication sector is a key enabler for social and economic growth and Pakistan's mobile market has significant potential, but current levels of mobile Internet adoption, smartphone take-up and usage of digital services lag behind those of other countries in the region by 2023,” the letter said.

The news organization said that it was projected that the economic contribution of the mobile industry in Pakistan could reach $24 billion, accounting for 6.6 percent of the GDP.