The telecoms sector in Pakistan withstood the impact of COVID-19 in the fiscal year 2019-20 (FY2020) and showed sustainable revenues of Rs. 537.2 billion as compared to Rs. 550.4 billion in FY2019.
The industry also contributed significantly of $622.5 million (24 percent) to the country’s entire net Foreign Direct Investment (FDI). The Annual Report 2020 published by the Pakistan Telecommunication Authority (PTA) on Thursday revealed this.
The contribution of the sector to the national exchequer also increased by 129 percent (Rs. 278.4 billion), because of Cellular Mobile Operators (CMOs) deposits of $687.8 million under license and spectrum renewal fees and a substantial rise in the general nuisance tax (GST) and withholding tax (WHT), which was suspended last year under the direction of the Honorable Supreme Court of Pakistan.
PTA was ranked as a 4th generation regulator (G4) by the International Telecommunication Union (ITU), making Pakistan one of the top five regulators in the Asia-Pacific region and thus the only G4 regulator in South Asia. This recognition may be a testament to the rapid development of Pakistan’s ICT regulations and a step towards collaborative regulations.
Between January 2019 and September 2020, the collection of taxes and duties collected from individual customers, which was an untapped area for revenue collection before DIRBS, resulted in the collection of Rs. 7.7 billion.
In addition, the successful introduction of DIRBS has also made it easier to explore the potential for mobile handsets to be manufactured locally. Within the establishment of 29 local assembly plants, the supply of fair competition has resulted in the production of over 18.36 million local cell phones since 2019.
Besides the aforementioned taxes and contributions paid by the telecommunications industry, the FBR also collects a large sum against the importation of cellular mobile handsets, enabling only licensed and tax-paid handsets in Pakistan to be connected to telecommunications networks.