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New Taxes Will Kill Digital TV in Pakistan Before It Becomes Mainstream

HammerHead081

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The government of Pakistan has increased the taxes on “set top boxes”, IPTV boxes and DTH boxes in its latest revision. The move is primarily aimed at encouraging local production, however, the market has responded negatively to the development.

Digitization of TV in Pakistan is one of the lowest in the region. For a perspective, less than 5% of Pakistani TV devices are digital, compared to 95% of TV digitization in neighboring country India. These numbers show that Pakistan is yet to start its journey towards TV digitization.

While DTH services have seen regulatory and judicial hurdles for years now, Pakistan is yet to see its first DTH operator, especially at a time when most of India’s TV consumer base has gone digital.

Considering that Pakistan has barely just started, taxing these digital TV boxes is beyond comprehension as the rule of thumb is to tax established and flourished industries instead of pressing the nascent sector that is to compete with giants from the Indian territory.

Interestingly, its not only digital TV boxes that are taxed heavily, fiber optic — that’s used for the broadband services and essentially for the IPTV services — are also taxed higher than other sectors.

For reference, the total amount of duties and taxes on the import of fiber optic cable (which is required not just for FTTH but also for 3G/4G/5G tower site backhaul) is now 62.5% at the time of import (20% CD, 7% Additional CD, 10% RD, 20% Sales Tax and 5.5% Advance Income Tax – non adjustable).

This actually means that a product that costs $1 at the source is priced at $1.62 when it reaches Pakistan.

On top of this, there’s currency devaluation, which in itself is altogether a challenge that’s beyond anyone’s understanding.

We do understand that a lot of items (such as mentioned above) are taxed by the government not only to make extra money but to also encourage local production, however, taxing a sector that is yet to even begin its flight is never going to work.

India, for instance, taxed its digital TV products after they had attained a sufficient uptake. And this is also probably why they were able to achieve such a high digital TV penetration in the country, i.e. by lowering the entry cost.

It would be more wise to let a sector flourish and then tax it as per usual standards to reap maximum benefits.

Another point worth noticing is that there are items, such as set top boxes and fiber cables, that aren’t produced locally at the required scale to meet the market demands. Therefore, it is necessary for these items to be imported from abroad to keep up with the demand.

The government should also consider the fact that it can’t blindly increase tax rates for a range of products without considering that there are items which are already highly taxed.

The ideal scenario is to look for each item, the associated taxes on it and the impact (positive or negative) the taxes could bring on the sector, economy and the country, before actually revising each and every item.

Source: https://propakistani.pk/2019/07/03/...-tv-in-pakistan-before-it-becomes-mainstream/
 
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Good...TV is luxury...
Bhai sab kuch luxury hai. Paani bi luxury, saans lena bi luxury... sab pei tax laga dou. Aesa ghatiya taxes daal kei awaam ko agey bharney sei roko. Tum log patwari ho PTI kei.

Good...TV is luxury...

Doosri baat yeh kei. Have you read the article you boneheaded moron? The article says that TV digitization is at 5%... first have low taxes and when it reaches 60-70% taxes... then put these taxes on. This will even generate much more revenue.
 
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Yes even hot water is luxury in cold weather..tough times needs sacrifice..people voted for it
UK post ww2 was under sever austerit for 10-15 years, People could only heat their homes for few hours, and Petrol could only be bought by those whose job was imperative for economy, clothing was scarce all the while Uk was sending huge contribution and Aid to other developing countries, This is how nations are built from ashes and not from mere wishes
 
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1st i commend Pakistani Goverment atleast they are trying but problem is they are going too hard on everything and Pakistani already pay high amount of taxes indirectly majority of this will hit low to middle class which could have been created as the Backbone of Pakistani Economy

One thing i find really strange is any sane person with little understanding of money will understand that Majority of trade in Pakistan happens through Cash which is easier for people to hide.
A simple solution why dont they give 1 year notice to Banks to build Cash Less infrastucutre and force them to setup Contact less and Smarter Machines on every store.
Ban Every note higher than 50 RS and dont print any note higher than RS 50 1st 2 years will be really hard but it will boost economy much higher than all these shenanigans they are currently doing
 
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This won't kill digital TV, the internet will, just like its killing TV in the developed world.
You have online services to pay for. Digital TV will bring them. I want to watch a pakistani cricket match or Premier league matches in HD.

1st i commend Pakistani Goverment atleast they are trying but problem is they are going too hard on everything and Pakistani already pay high amount of taxes indirectly majority of this will hit low to middle class which could have been created as the Backbone of Pakistani Economy

One thing i find really strange is any sane person with little understanding of money will understand that Majority of trade in Pakistan happens through Cash which is easier for people to hide.
A simple solution why dont they give 1 year notice to Banks to build Cash Less infrastucutre and force them to setup Contact less and Smarter Machines on every store.
Ban Every note higher than 50 RS and dont print any note higher than RS 50 1st 2 years will be really hard but it will boost economy much higher than all these shenanigans they are currently doing
I think you meant Rs. 500 but yeah that is a good solution.

This won't kill digital TV, the internet will, just like its killing TV in the developed world.


That's not a good argument to make. Address his point, don't attack him.
My point is right. You expats don't have to face repercussions like we do so it is easy for you guys to say INCREASE TAXES, CARS ARE A LUXURY, INTERNET IS A LUXURY, BUILD YOUR OWN CAR
 
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Honestly Cable Television and Pay TV is dying off all over TV networks in the developed world are struggling to make ad revenues people are cord cutting or like I do just kept Cable TV for cheaper data prices hence triple play package I occassionally watch Cable TV for PPV or News thats it
 
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The government of Pakistan has increased the taxes on “set top boxes”, IPTV boxes and DTH boxes in its latest revision. The move is primarily aimed at encouraging local production, however, the market has responded negatively to the development.

Digitization of TV in Pakistan is one of the lowest in the region. For a perspective, less than 5% of Pakistani TV devices are digital, compared to 95% of TV digitization in neighboring country India. These numbers show that Pakistan is yet to start its journey towards TV digitization.

While DTH services have seen regulatory and judicial hurdles for years now, Pakistan is yet to see its first DTH operator, especially at a time when most of India’s TV consumer base has gone digital.

Considering that Pakistan has barely just started, taxing these digital TV boxes is beyond comprehension as the rule of thumb is to tax established and flourished industries instead of pressing the nascent sector that is to compete with giants from the Indian territory.

Interestingly, its not only digital TV boxes that are taxed heavily, fiber optic — that’s used for the broadband services and essentially for the IPTV services — are also taxed higher than other sectors.

For reference, the total amount of duties and taxes on the import of fiber optic cable (which is required not just for FTTH but also for 3G/4G/5G tower site backhaul) is now 62.5% at the time of import (20% CD, 7% Additional CD, 10% RD, 20% Sales Tax and 5.5% Advance Income Tax – non adjustable).

This actually means that a product that costs $1 at the source is priced at $1.62 when it reaches Pakistan.

On top of this, there’s currency devaluation, which in itself is altogether a challenge that’s beyond anyone’s understanding.

We do understand that a lot of items (such as mentioned above) are taxed by the government not only to make extra money but to also encourage local production, however, taxing a sector that is yet to even begin its flight is never going to work.

India, for instance, taxed its digital TV products after they had attained a sufficient uptake. And this is also probably why they were able to achieve such a high digital TV penetration in the country, i.e. by lowering the entry cost.

It would be more wise to let a sector flourish and then tax it as per usual standards to reap maximum benefits.

Another point worth noticing is that there are items, such as set top boxes and fiber cables, that aren’t produced locally at the required scale to meet the market demands. Therefore, it is necessary for these items to be imported from abroad to keep up with the demand.

The government should also consider the fact that it can’t blindly increase tax rates for a range of products without considering that there are items which are already highly taxed.

The ideal scenario is to look for each item, the associated taxes on it and the impact (positive or negative) the taxes could bring on the sector, economy and the country, before actually revising each and every item.

Source: https://propakistani.pk/2019/07/03/...-tv-in-pakistan-before-it-becomes-mainstream/
PTCL smart tv costs like Rs500
 
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So is internet - what are you engaging in such luxuries for?
No, internet is not a luxury but a necessity. Norway even included it in the basic human rights. You can't live without internet in modern world. All bills are paid online, we can talk to our families and friends at no additional cost.
But TV is just for entertainment.
 
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