Secretary Investment Ashraf Hayat has assured the telecom operators of full cooperation of the government in launching of the 3G technology. The Secretary expressed these views while talking to a delegation of Pakistani Telecom Industry who called on him at his office.

The agenda of the meeting was to discuss various issues and concerns of the Telecom Industry regarding the auction of 3 G Spectrum by the Pakistan Telecom Authority (PTA) and current taxation policy of the Government.

Public representatives included Nisar Masoor, Chief Customer Officer, Federal Board of Revenue, Mushtaq Ahmed Member Telecom, Minister of Information and Technology, Arif Inam, Director General (Commercial Affairs), PTA, Aslam Hahab, Director General (Licensing) PTA and Arif Agha Director (Economic Affairs), Pakistan Telecommunication Authority.

The Telecom Industry was represented by Aamir Ibrahim, VP Mobilink, Maj. Gen (R) Hamid Hassan Butt, GM Coordination Ufone, Moqeem-Ul-Haq GM Strategy Ufone, Irfan Wahab Khan, Executive Vice President Telenor, Qazi Muhammad Idris, Director Public and Government Affairs, Telenor, Ahmad Faisal Sr. Manager Regulatory Affairs Zong and Syed Ahmed Suhail Pirzada Consultant Zong.

Representatives of the Telecom Industry apprised the public sector participants that Pakistan Telecom Industry has matured enough to move to the technology of 3G Spectrum which is a part of its natural evolution and growth process.

They called for formulation of policy frameworks to handle this process smoothly and in consultation with the Telecom Industry, so as to safeguard their business interests in Pakistan.

It was further requested to rationalize process of auctioning of the spectrum for this new technology into Pakistan.

Secretary Investment said the government has to strike a balance between securing the interest of consumers and ensure survival of players.

While referring to the Taxation Policy of the Government, it was informed by the private sector that total cost of mobile ownership in Pakistan has become one of the highest in the world due to imposition of activation tax, GST 21 percent, import duty of Rs.500 and handset duty of Rs. 250.

It was requested that actual retailers and distributors of mobile sets in the country be also embedded into this tax regime and the import duty be subsequently withdrawn by the Government.

In response, representative from Federal Board of Revenue informed the participants that there are some conceptual problems regarding the understanding of the taxation system.

He said that Pakistan Telecom Industry earlier has always enjoyed a tax exemption regime which includes exemptions on custom duty, sales tax, federal excise duty, import of plant and machinery etc.

He referred to activation tax and said that it is like Sales Tax which is to be paid at import and supply stage. As far as import duty is concerned the industry was heavily exempted up to the time of current year’s budget.

Again, the rate of import duty, Irrespective of the total value, was kept at flat rate of Rs. 500. This was done by the Government in order to attain national objectives which were to cut down imports.

The private sector appreciated efforts of the Ministry of Investment for providing a platform to have a productive dialogue with the Government to present their concerns and issues directly to the policy makers.