Digital Stakeholders to protest against Imposition of Taxes on Internet by Punjab Government

Pakistani bloggers and internet companies today decided to blackout their websites in protest against the recently imposed taxes by the Punjab Government on internet services, according to a joint statement issued by digital publishers of Pakistan at a press conference in Lahore. Digital stake holders are protesting against imposation of these taxes in the theme of “Don’t Tax the Internet”.

Punjab government – through an SRO – imposed this week a whopping 19.5% tax on all kinds of internet usage for those with Rs. 1,500 or above monthly bills or 2Mbps and above speeds.

This tax is imposed on all kinds of internet services in Punjab including 3G, 4G, DSL, EVDO, fiber etc. Other provinces and centres are likely to follow the suite.

Digital publishers, who have support from cellular mobile operators, banks, consumer associations, PASHA and ISPAK along with civil society, said that the country’s top websites are already running black home-screens in protest against taxes on internet.

This country-wide internet blackout campaign is likely to be supported and acted upon by thousands of Pakistani websites and bloggers who have demanded immediate withdrawal of taxes on internet.

According to a joint statement from digital publishers, this tax by the Punjab Government on internet is going to hamper the current 3G/4G uptake that has reached 15 million subscriptions in just one year of 3G/4G launch.

After several delays – spanning many years – Pakistan auctioned 3G and 4G licenses last year and telecom operators invested $1.1 billion on spectrum auction only. Several hundred million dollars were also spent on network up-gradation, however, telecom operators – in a joint statement earlier this week – said that their future investments on network rollout and upcoming spectrum auction is conditional with reversal of this tax.

Punjab is likely to collect around Rs. 3 billion in taxes from the sector this year; however, corresponding negative growth on internet uptake due to these taxes will cause the national economy an estimated loss of Rs. 100 to Rs. 200 billion in five years (Reference PEW research).

Studies show that 10 percent uptake in broadband subscriptions increases national GDP by 1.5% and slowness of internet uptake due to these taxes is only going to harm the already struggling economy of Pakistan.

Punjab government, on one side, is making efforts for digitization of the province through several initiatives from PITB and distribution of several hundred thousands of laptops each year, while on the other side it is imposing taxes on internet to block the growth and academic potential of the youth.

New taxes are also going to block development work in e-education, e-health and e-banking sectors.

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