Mobile phone has become one’s daily life partner; whether it is being used for social contact, entertainment or just for fun. An average user spends more than Rs. 500 a month, at least. But do you know how much is being forcefully snatched by government and you are happy with that? No, because everyone is so afraid of the terms “Tax” and “FBR” that no one tries to take a hint that how huge he pays every year to the government without asking for a reward.

Would you believe if I say that the collective amount is in billions? Yes, the government of Pakistan collected Rs. 48 billion from mobile phone users in the last year only. This was done in the name of 14% withholding tax and a number of more such taxes that we pay without even taking a little notice on it.

The interesting and may be the much tricky fact is that our financial gurus at the helm of affairs including the FBR and Ministry of Finance, collect this amount from the poor public under a legal promise to return them back (adjust it) at the time of filing tax returns. Even more interesting is the fact that this tax is collected from the people who do not fall into the taxable bracket owing to their lower income levels.

It was proved when the FBR furnished a report to the parliamentary committee revealing that only Rs. 4 billion was claimed last year out of Rs. 48 billion; merely 8% of the total. However, remaining 92% (Rs. 44 billion) was never returned to the public.

In other words, the hard earned money of the lower and middle class citizens is leaked out of their pockets in shape of a tax on mobile recharge is still lying with the government. It happens every year and we are only crying over Panama and Surrey Palace!

The Hidden Telecom Taxes

The journey of this non-transparent telecom tax starts from the minute a person buys a mobile phone and before they have even uttered the word, “Hello”. They are bombarded with the hidden taxes that could be as high as Rs 2,250, not counting the withholding tax. The breakdown of telecom taxes on consumer includes:

  • Sales Tax on a new mobile phone that ranges from Rs 300-1500
  • SIM issuance tax of Rs 250 that includes activation and SIM supply tax
  • Advance Tax of 14%
  • Federal Excise Duty/ GST on voice 18.5%-19.5%
  • FED/GST on Mobile Data is taxed from 0-19.5%
  • Withholding Tax of 14%

In addition, the government is also looking towards imposing an additional tax known as “IMEI Tax” which has been on hold for the last two years. Each mobile phone has a unique IMEI number and the government wants the mobile phone users to pay additional tax based on this number.

Mind you in the phones where a person can use two or more SIMs at the same time, there are different IMEI numbers, which means double or quadruple the tax for a common man.

Where Does the Money Go?

This is all how you are being looted every day and you don’t even take a little notice on it. The government has successfully collected Rs. 48 billion from mobile phone users in the name of taxes in one year. But the question arises where did it all go?

With billions of rupees, over the years the government could’ve built Metro bus projects in various cities of Pakistan as Rs. 29.8 billion was spent on Metro Bus Lahore whereas Metro Bus Multan was completed at the cost of Rs 28.5 billion.

On the other hand, we should have seen hundreds of hospitals and many top class universities across Pakistan but unfortunately no one is talking about where did all the money go. With billions of rupees in revenue from telecom taxes, why do we still need the support and loan from international institutions and banks?

We have risen the question, you are welcome to write your feelings in the comment box below.