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Digital inclusion and mobile sector taxation<br />
Reduction of SIM card taxes in Pakistan<br />
and Bangladesh<br />
In Pakistan and Bangladesh, taxes are<br />
imposed on the purchase and replacement of<br />
SIM cards. This type of tax has a particularly<br />
adverse impact in these countries, given<br />
the low average income of the population.<br />
By constraining mobile access, these taxes<br />
represent a significant barrier to access to<br />
basic mobile services and mobile internet.<br />
Recognising these impacts, both countries<br />
have implemented a series of tax reductions in<br />
recent years.<br />
In Pakistan, the SIM tax was reduced from PKR<br />
2000 to PKR 1000 per SIM in 2004, PKR 500<br />
in 2005, and to the current level of PKR 250<br />
in 2009. I Over this period, market penetration<br />
has increased rapidly, from 3% in 2004, to 56%<br />
in 2009, reaching 71% in 2013.<br />
Figure 21<br />
Total market penetration and SIM card taxes over time<br />
in Pakistan<br />
1<br />
2<br />
3<br />
77.5%<br />
1 SIM sale tax reduced from<br />
2000 PKR to 1000 PKR per SIM<br />
2 SIM sale tax further reduced<br />
to 500 PKR<br />
1.0%<br />
3 SIM sale tax lowered from<br />
500 PKR per SIM to 250 PKR<br />
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014<br />
Source: GSMA Intelligence Database and Deloitte analysis<br />
I<br />
Some operators have indicated that there exists an additional PKR 250 tax on activation, but its application is in<br />
dispute.<br />
44
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