mobile-phone-user

If you remember, Supreme Court of Pakistan has ordered a couple of days ago to suspend all taxes on mobile phone card usage in Pakistan. As per our understanding, the telco companies were ordered to devise a mechanism within two days but the companies were waiting for written orders from the Apex Court to do so.

However, the latest reports confirm that written orders of the Supreme Court have been delivered to all the telecom operators in the country and as the date changes midnight today (June 13th, 2018 at 11:59 pm), the mobile phone users in Pakistan will get Rs. 100 as a whole on a Rs. 100 card.

According to Supreme Court orders, this relief will be valid for next 15 days only as the Federal Board of Revenue has been tasked to submit a detailed report suggesting the way forward in consultation with all the stake holders on next hearing. However, it is likely to see a 15-day extension to reach out to the final verdict by the Supreme Court.

Government to Face Loss of Rs. 123 Billion a Year

As the Apex Court orders are widely welcomed in Pakistan, however it doesn’t bring good news for the national exchequer. It is reported that the tax exemptions will result in a combined yearly loss of almost Rs. 123 billion to federal and provincial governments; Rs. 75 billion by the provincial governments and Rs. 48 billion by the federal government.

The FBR collects withholding tax at 12.5% as of today and if it gets exempted in full, a total of Rs. 48 billion loss will be seen per anum. On the other hands, provincial governments share 19.5% and that totals to Rs. 75 billion annually. In this way, if the total tax exemption becomes effective, the tax collectors will see a revenue loss of Rs. 123 billion a year.

However, enjoy 100 out of 100 for next 15 days!