Govt Likely to Remove Sales Tax on Laptops and IT Equipment

The government is considering a proposal in Finance Act 2022-23 to abolish sales tax on laptops and IT devices, Pro Pakistan has learned from reliable sources.

Among other proposals, the government is considering reducing fees and taxes for building cloud infrastructure and raising the advance income tax (AIT) on telecom services to 8%.

The ICT department has come up with the following suggestions to facilitate the IT sector.

1. Customs and tax breaks for cloud infrastructure
2. To boost exports, 5% of the annual IT export value will be given to the Pakistan Software Export Board (PSEB).
3. 100% LC Margin Regulation of State Bank of Pakistan (SBP) on April 7, 2022, eliminating the telecom sector
4. The sales tax rate on laptops and IT devices has been reduced to zero.
5. Adjustment of advance income tax (AIT) on telecom services up to 8%
6. Accuracy and harmonization of federal and provincial service tax rates on telecommunication services.

Prime Minister Shahbaz Sharif directed the ICT department to come up with a plan to increase ICT exports to 15 billion in the next two years after proper consultation with stakeholders.

At a recent high-level meeting, he assured the ICT department of every possible cooperation to achieve this goal.  It is noteworthy that the offer arrived at the eleventh hour, which deprived the members of the Council of Ministers of a great opportunity to study the proposals.

The Cabinet Secretary said that ministries and departments were frequently instructed to submit their summaries before the cabinet meeting and in accordance with the 1973 work rules, but unfortunately violations do occur.

The Cabinet Secretary also indicated that Cabinet decisions may not be requested on the basis of presentation under the Labor Rules 1973 as all decisions must be taken on the basis of summary.

He suggested that the Council of Ministers agree in principle that the ICT department submit its proposals to the Economic Coordination Committee (ECC) after consultation with relevant stakeholders, where a financial decision is required, for a detailed discussion.  The decision of the European Coordination Committee will be submitted to the Council of Ministers for approval at a later time.