KARACHI: In footstep of the federal government in imposing taxes on different items, the Sindh government seems to have gone astray by imposing huge tax on the items which are modern basic necessities — internet and broadband services. While, the center has a set policy of taxing luxury items, the Sindh government is heading towards making internet unaffordable.
Most of the developed countries are either providing these facilities free of cost or thinking about devising a mechanism in this regard. However, the provincial government seems to have committed a blunder in the same fashion as it did with the ride-hailing services. Last year, the government had stirred up first the controversy of banning the ride-hailing services then imposing so much taxes that it was feared that this would destroy the emerging industry. Later, it ended up with imposing 5 percent tax on it.
Now, internet and broadband services have been put on the line, which may turn out to be a disaster as these facilities are the backbone of a developed country. Sindh has announced to impose as much as 19.5% sales tax on internet and broadband services.
“The Sindh Revenue Board has withdrawn the exemption of sales tax on services from internet and/or broadband services with effect from July 1, 2019,” read a notification of the Sindh Revenue Board (SRB).
The sales tax will be applicable from July 1, regardless of speed, charges and packages.
“Internet and broadband services of up to 2 mbps speed and 4 mbps speed, the charges for which did not exceed Rs1,500 per month and Rs2,500 per month respectively, were exempt from sales tax, the said exemption has been withdrawn with effect from July 1, 2019,” said the notification.
A SRB official on condition of anonymity has admitted that mass internet usage helped ensure economic growth, healthcare, innovation and competitiveness.