ECO402 GDB Solution 2021-VU-Microeconomics-Withholding tax
ECO402 GDB Solution 2021-VU-Microeconomics-Withholding tax
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00:00Bismillahirrahmanirrahim Assalamualaikum Dear Students and Viewers and Audience
00:05Welcome to my YouTube Channel DigitLearnerPoints. In today's video tutorial, we will solve microeconomics which has subject code ECO-402.
00:18Let me increase the size of the page to make it more clear to you and visible. So, I think it is good.
00:30Ok. So, this GDP has total marks 5. Starting date is Tuesday, February 22, 2020. Closing date is 28 February 2022.
00:44Status is open and the question title is the impact of tax.
00:48Question description means in question description, the examiner given you a situation or scenario on the basis of that situation.
00:58He or she is going to ask you some task related to this situation.
01:08So, let's start reading the case and then we will read the task associated with this case.
01:17The telecom sector has emerged as one of the vibrant sectors of Pakistan's economy.
01:22Increasing revenues, growing investment and enhanced contribution to the financial sector are all marks of the sector for many years now.
01:31This sector is complex, extensively regulated and rapidly evolving to keep up with the global markets and initiatives.
01:41Internet plays a vital role in education. Popular search engines like Google, Yahoo, etc. are the topmost choice of people as they offer an easy and instant read to the vast amount of information and knowledge in just a few seconds.
01:57Hence, Internet has become a major tool for effective teaching as well as learning tool.
02:04At the start of Q2 2022, government of Pakistan increased withholding tax which is also known as advanced tax on the telecom industry.
02:14Therefore, every recharge will now be taxed at a rate of 15%. The detail of tax is described in the following table.
02:25Withholding tax currently is 10% before launching the mini-budget. After that, the new rate is 15%. There is a jump of 5% from 10% to 15%.
02:38Recharge example, if you are going to make a recharge of Rs. 100, then what will be the balance that you receive? Before tax it is 90.91, now it is 86.96.
02:54So, requirement being student of economics, logically discuss that how does this policy affect the telecom industry. Also, discuss the impact of this tax on education.
03:07So, let's see the answer.
03:10The recent surge in withholding tax rate on telecom industry influences sectors such as smartphones and data usage in terms of price negatively.
03:26This new imposed tax levy makes it hard for people from all walks of life to have such advanced technologies for better efficiency and performance.
03:37Because, as a result of increase in withholding tax, the prices of these services and products such as smartphones, laptops, and internet services become dearer.
03:50So, people from the middle class and especially from the poorest class become out of their range.
03:59So, this is the thing that I am going to explain in the next two lines.
04:05Now, from the education perspective, in today's modern era where students are much engaged in learning through online mode of education becomes dearer for middle class students and even worse for poorest students.
04:22So, in that scenario, I am going to tell you that when students have no latest or modern equipment such as smartphones which they are much used for their learning purposes.
04:38For example, they are getting their online classes through their smartphones and for using smartphones to avail these services, they are going to purchase internet services and for this, they are going to become dearest.
04:58As a result, vast majority of the students specifically belong to middle class and poor students are difficult to avail such facilities.
05:12So, in this way, the increase in the withholding tax impacts the telecom industry as well as specifically from the point of education, it hits both teachers, education institutions, and more emphasizes on the students in negative sense.
05:33I hope you have enjoyed these solutions. If you have any query or suggestion, please comment to the comment section and drop.
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06:06Thanks for watching. Assalamualaikum.