Pakistan

Top court suspends 'exorbitant' tax on prepaid mobile bills

Amount of tax imposed is illegal: CJP

Muhammad Haroon June 11, 2018

Representational image of a man using mobile phone. PHOTO: REUTERS

LAHORE: The Supreme Court on Monday suspended 'exorbitant tax deductions' on prepaid mobile cards.

Chief Justice of Pakistan (CJP) Saqib Nisar gave two days for the order to be implemented at a hearing of the suo motu case at the apex court's Lahore Registry. “Rs38.08 are deducted on a prepaid mobile card of Rs100,” CJP Nisar remarked. “This is illegal.”

Such high taxes on prepaid mobile bills amount to exploitation: CJP

Justice Ijazul Ahsan said a policy on levying tax ought to be formulated. “How can a hawker be brought into the tax net?” he said.

Taking notice of deductions as tax, the Supreme Court in May had sought replies from all telecommunication companies and Attorney General of Pakistan Ashtar Ausaf Ali. In a subsequent hearing, the bench had demanded a clarification on whether withholding taxes were being collected as per law. “The law for withholding taxes appears to be imperfect,” the top judge had remarked. “Withholding taxes cannot be levied on a labourer who earns Rs100 a day. How can we collect withholding taxes from daily wage earners?” he added.

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

In May 2017, the 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 eating up over one-third of revenue.

COMMENTS (13)

concerned | 6 years ago | Reply Good job done by the judiciary. consumers should not have to deal with any illegal taxes imposed by the government. FBR should also wake up and stand up to the high taxes imposed by our government.

Citizen | 6 years ago | Reply @separation of duty: Yest it is. isn't it? Can't you see what telecom companies are doing with us? PTA is not controlling them actually they are controlling.

VIEW MORE COMMENTS

Citizen | 6 years ago | Reply It is the duty or not but its wrong what Telecom companies are doing with us! they are already paying less taxes than they receive from the customer, and CJ have the authority of sou motu then shouldn't he practice it for public interest even you have the oath for working the best interest of public and fulfilling of law.

Haris | 6 years ago | Reply The hawkers and every member of public are already paying almost 50-60% tax on Petroleum Products daily !

Abdul Qadir | 6 years ago | Reply It's all toopy drama and nothing more then that where is U.B.killer of 200 people and others from whom billions recovered from there homes no proceedings on fast track not even known where and what ????

separation of duty | 6 years ago | Reply Is it the job of the judiciary to determine the amount of taxes that can be levied?

Sabi | 6 years ago | Reply l order removal of tolls on highways motorways likewise all excise duties on oil and gas because 95% public uses them.

Sabi | 6 years ago | Reply Even if you give them golden spoon they are not going to remember you once out. Stop playing gimmicks.

Pro Truth | 6 years ago | Reply Phones should only charge sales tax/VAT! nothing else. only when the calls are made not when balance is added. So charge people when they make call or use the service not in advance. every other tax is illegal on phone top ups!

rashid | 6 years ago | Reply Government has been relying on indirect taxes and withholding taxes for years now. Now they will have to do the hard work of collecting taxes from high income earners.

Engr.Amir Sultan Rana | 6 years ago | Reply Its a good step. But Chief Justice should have given them solution suggestion too. Like this amount of percentage is appropriate. In this way, it will be easy to conclude the case.

Syed Usman | 6 years ago | Reply @waseem: Where and how did you make the connection between withholding tax on mobile cards and anti-money laundering?! please explain as on what level of strategy you made this connection. I would like to see a clear presentation of causal relation established in your "hypothesis". Thanks

waseem | 6 years ago | Reply Supreme Court interfere in the administrative affairs of executives as well as suspension of withholding tax is against the Anti-Money laundering regime. this order is just before the Paris Conference of Financial Action Task Force to review the questionable financial affairs of Pakistan and decide to blacklisting the Nation and impose International sanction. Supreme Court decision will provide solid ground for blacklisting the Nation under violation of UN Conventions.

Replying to X