The Supreme Court of Pakistan has just allowed mobile operators to deduct all previous taxes on mobile cards and recharge which were suspended by the apex court last year.
In simple words, from today onwards Rs. 100 card will not credit for the full amount to your mobile account as operators would deduct a significant amount of taxes as they were doing previously.
As per local media reports, Chief Justice of Pakistan, Justice Asif Saeed Khosa while reading the short order released today, said that the supreme court will not interfere in the matters of public revenue and tax collection system. The three-member bench of the apex court also included Justice Azmat Saeed and Justice Qazi Faez Isa to give the final verdict.
With that a joy period of 10 months for the cellular users comes to an end. Not to mention that highest court of Pakistan issued a stay order on June 12th last year to suspend all taxes on mobile phone prepaid cards and recharge. However, the same has been withdrawn forthwith.
It is also pertinent to mention that the Federal Board of Revenue (FBR) failed to devise a new mechanism regarding tax deduction on mobile phone recharge after consultation with mobile operators, as directed by the apex court asked last year.
Meanwhile, Pakistan Telecommunication Authority (PTA) told the apex court that Rs. 90 billion tax was not collected in the last 10 months due to the suspension of tax collection law.
However, while withdrawing the stay order, the CJP remarked that it was imperative that the government enforce the relevant law correctly and justly since a considerable amount of money was being withdrawn from the masses because of this law.
As the Supreme Court will now refrain from interfering in taxation matters, the telecom operators are expected to charge as much as Rs. 40 on Rs. 100 cards. Before the suspension of tax on mobile top-ups, the consumers were paying 42% tax, including 19.5% FED, 12.5% WHT and 10% service/ maintenance charges on every Rs. 100 card.