Pakistani blogs and websites today blacked their sites in opposition top a recently introduced general sales tax on internet and data usage. The 19.5% tax was imposed on 3G, 4G, DSL, EVDO, fibre Internet from May 29 in the Punjab Province. The blogs and websites displayed “Don’t tax the internet” message as part of a major blackout campaign against the tax. The tax covers all connections with a speed of 2Mb/s or higher or consumers who pay more than $14.50 for connection. Only those using the internet for educational purposes were spared.
According to ProPakistan, the country has 137 million mobile connections with 3G and 4G connections reaching 14 million as of Q1 2015. An estimated 56% of the country’s population will be liable to pay the internet usage tax. There is increasing worry that the new tax will largely affect the Telecommunication sector as just last year, Telcos bought 3G/4G licenses worth $1.2 billion last year, paying an additional 10 percent withholding tax. The same Telcos are also paying increased import duties for telecom equipment from 5 to 20% to the government of Pakistan most of which goes to the roll out of the 3G/4G.
The new tax regime will raise $29 million for the Punjab government, where more than half of Pakistan’s population resides but could in the long term hinder the growth and usage of the internet. The blogs and websites have threatened to close down their content if the government does not withdraw the tax. Other than the internet tax regime, Pakistan also enforces strict internet censorship laws where YouTube was banned for featuring an Anti-Islam movie trailer. In March, The Pakistan Telecommunication Authority (PTA) banned blogging platform WordPress.com due to “security reasons”