Pakistan Levies 20% Tax on Internet Access

Taxes are a major cost item for users of communications services, in Pakistan or the United States, and officials increasingly are looking at Internet access as a lucrative source of tax revenue.

In Pakistan, officials have proposed a new 19.5 percent general sales tax on Internet and data usage. The tax applies to fixed or mobile Internet access.

Import taxes also are applied to infrastructure required to build 3G or 4G mobile networks, as well as all fixed networks.

Import duties for telecom equipment range from five percent to 20 percent, said  Sohaib Sheikh, Information Communication and Technology Think Tank (ICT3) president.

Economics matters, and prices matter, so it is easy to predict that adoption rates for mobile Internet access will be negatively affected.

In the U.S. market, Internet service taxes might be coming, as well.

Eventually, it would seem inevitable that high speed access service revenues will be taxed to support universal service programs in the U.S. market, for example.