A number of Pakistani internet companies and bloggers have blacked out their websites to protest a new tax on internet services, with warnings that the fee could slow adoption of 3G and 4G services.
Digital publishers, which have the support of mobile operators and banks, issued a joint statement at a press conference in Lahore. This was in reaction to the government of Punjab imposing a 19.5 per cent tax on all internet services (via 3G, 4G, DSL and fibre) with a speed of 2Mb/s or higher or a monthly bill of PKR1,500 ($14.50) or more, ProPakistan reported.
Pakistan’s 3G and 4G connections reached 14 million in Q1. The country has 137 million total mobile connections, according to GSMA Intelligence. ProPakistan estimated that 56 per cent of the the country’s population will be liable to pay the internet usage tax and other provinces and metros (Islamabad) are likely to follow.
After many delays, mobile operators spent $1.1 billion in last year’s 3G and 4G spectrum auction and then invested heavily in their networks. The operators, in a joint statement earlier this week, said future investment in spectrum and networks is conditional on the reversal of the tax, ProPakistan said.
While the new tax would raise about PKR3 billion ($29 million) this year, the negative impact on internet growth would cause the national economy an estimated loss of PKR100-200 billion over five years, according to Plum Consulting.
The new tax will also curb work in e-education, e-health and e-banking.