SC takes suo motu of mass tax imposed on prepaid mobile bills

Bench fixes hearing for May 10


Hasnaat Malik May 03, 2018
Prepaid customers can opt for the service without paying any fee and will be entitled to it as long as they are consuming monthly credit of Rs200. PHOTO: FILE

ISLAMABAD: The Supreme Court on Thursday took suo motu notice of massive deductions of prepaid billing as tax by mobile companies.

The court issued a notice to all mobile companies and the Attorney General for Pakistan Syed Ashtar Ausaf Ali.

Withholding tax on mobile banking services likely

The three-judge bench, headed by Chief Justice of Pakistan Mian Saqib Nisar, noted scores of complaints from the general public regarding deductions of huge amount in the name of multiple taxes.

The bench fixed the hearing on May 10.

In May 2017, FBR was considering expanding the scope of 0.4% tax on banking transactions conducted by non-filers of tax returns to mobile banking services in the budget amid an outcry from telecom operators against heavy taxes that are eating up over one-third of their revenues.

Yet the tax authorities are in no mood to offer any significant respite to the telecom sector except for removing the tax on cash withdrawals by branchless banking agents.

SBP develops ‘universal’ mobile phone app for financial transactions

The agents were paying up to 12% tax on the commission they earn from banks and 0.3% tax on cash withdrawals.

The proposal to withdraw the withholding tax on cash withdrawals by branchless banking agents has been given by the State Bank of Pakistan. The central bank is pursuing the National Financial Inclusion Strategy on the recommendations of global donors.

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