No Tax Deduction on Mobile Phone Balance Until Supreme Court’s Next Order

Chief Justice of Pakistan Mian Saqib Nisar has ordered that there will be no tax deduction on mobile phone balance until Supreme Court delivers another order in the case. He said that the directive that was issued by the Supreme Court to ban deduction of taxes on prepaid cards still holds.

On June 11th Supreme Court issued the order, restraining Federal Board of Revenue (FBR) and telecom providers from deducting the taxes on mobile phone top-up cards.

FBR followed the order of the Court and said that for 15 days no taxes will be cut on mobile phone cards. Now it has been more than 15 days and still, no taxes are cut because the Supreme Court has clearly stated today that taxes forced on the top-up of prepaid cards will not be deducted anymore.

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Chief Justice said, “It was said that the decision to suspend tax deduction on mobile balance was for a limited time period and that the practice would resume following the expiry of two weeks.”

Adding, “The taxes on mobile balance cannot be deducted until the court’s next orders. The decision to suspend tax collection on mobile cards will hold until then.”

When a consumer used to load a Rs 100 mobile card, 12.5pc of the total amount was cut as withholding tax, 10pc of the whole goes to the telecom operator. So a consumer is left with Rs76.94 of which the government cuts 19.5pc sales tax (Rs 15). In the end, a consumer can only consume Rs61.93 out of a Rs 100 card.

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