Pakistan pulls back from possible violation of GATS commitments?

Posted on October 29, 2012  /  0 Comments

The termination of voice calls is a form of trade in services which is in many countries, including Pakistan, governed by the General Agreement on Trade in Services (GATS). The buyer of the service is the company abroad that wishes to terminate voice calls in Pakistan. The seller is the international long distance operator in Pakistan who receives the calls and terminated them on various Pakistan telephone numbers. Under GATS, the sellers in Pakistan are free to enter into any kind of commercial arrangement with foreign operators. What cannot be done is for the government to get involved. That is exactly what the government of Pakistan did, by setting country-by-country termination rates, and imposing a tax. The US government took the first steps to raise GATS concerns. But before that, the courts stepped in.

Giving instant relief to thousands of overseas Pakistan on Eidul Azha, the Lahore High Court on Thursday suspended the notification of the Ministry of Information Technology imposing additional tax on incoming international calls. The LHC has immediately stopped the federal government from receiving the additional tax on incoming calls to Pakistan.

Many of 6.5 million overseas Pakistanis were protesting against the imposition of tax, which is widely believed as an attempt to ‘benefit’ a cartel of 14 Long Distance International (LDI) operators.

A Lahore based Local Loop Operator (LLO) Brain Telecommunication Limited challenged the additional tax on the incoming calls through a writ petition.


Those advocating Sending-Party-Network-Pays at WCIT should follow the case to see what the future will be like.

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