Excessive indirect telecom taxes

CHIEF Justice of Pakistan Justice Mian Saqib Nisar has taken suo motu notice on grave complaint by the public that an unreasonable and high amount of tax/other charges are being deducted from topping up of the balance through easy load and calling cards. Notices in this regard have been issued to the Attorney-General of Pakistan, all mobile phone companies and FBR and hearing fixed for May 8.
Telecom sector showed rapid growth and the number of mobile phone users has crossed the mark of 146 million. The number of 3G and 4G users has also reached 49.5 million and the users are increasing with the passage of each day. It is, however, regrettable that telecom sector in Pakistan is, perhaps, the most taxed one in the region and beyond. Different indirect taxes and charges are deducted from mobile cards or easy load like GST, withholding tax and maintenance fee. Withholding tax is totally unjustified and that is why mobile phone companies have been urging the government to withdraw this tax. This is because not all mobile users are taxpayers and they cannot claim refund paid in the shape of advance tax and even those who pay taxes are never reimbursed withholding tax by FBR. Rationalisation of taxes in the telecom sector was a major challenge being faced by the industry for the past few years. A few weeks back, mobile companies had submitted viable proposals to the government for reduction in taxes on cellular services but regrettably nothing of the sort has been announced in the new budget. Heavy taxation on mobile phone use amounts to fleecing of the general public. It is hoped that the apex court would go deep into the matter and make both the government and mobile companies to rationalise taxes and other charges.

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