South Asian Business news and information

In my earlier post, I wrote about the negative impact of GST on the PC sales in . Pakistan government did not impose any additional tax on mobile phone but kept the previous 15% GST (General Sales Tax) on mobile phone service and Rs 500 activation charge on new connections unchabged. Pakistani government is expecting that it will get Rs 35 billion from the mobile phone industry by doing so. The government is expecting that Rs 25 billion GST will come from GST and the rest Rs 10 billion will come from the activation charge. This amount of revenue will come to the state coffer with the assumption that mobile phone connection will have a 150% growth in the coming fiscal year (1 July 2006- 30 June 2007).

A telecom expert, Brough Turner brought to my attention that government had greatly reduced tariffs on mobile phone in the last 5 years. What I feel is that should first try to achieve a teledensity of 40%-50% and then focus on collecting revenue. When a country has a huge market of any product, naturally, the government will be able to collect good revenue. I wish that other South Asian countries did the same.

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