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100 for 100: No tax deduction on mobile top-up from today

KARACHI: Following an order by Supreme Court of Pakistan, cellphone service providers will not be deducting taxes on the top-up of prepaid cards for 15 days starting from Thursday (today), ARY News reported.

The apex court had on Monday suspended the deduction of taxes imposed on the top-up of prepaid cards by cellphone service providers and the Federal Board of Revenue (FBR), giving both two days to act on the orders.

A three-judge bench comprising Chief Justice of Pakistan Mian Saqib Nisar, Justice Ijazul Ahsan and Justice Umar Ata Bandial, heard the case at the apex court’s Lahore registry.

The court had directed that a comprehensive policy regarding tax on mobile phone cards should be charted out.

Justice Nisar questioned how a person who doesn’t fall within tax net is made to pay taxes on mobile phone top-up. Tax should be levied from a person whose cell phone use exceeds the fixed limit, he added.

Rs38.64 is deduced on account of different taxes from every recharge of Rs100, which is unreasonable and illegal, the judges had observed.

The Federal Board of Revenue (FBR) in collaboration with local cellular firmswill establish a new mechanism regarding tax deduction on mobile phone recharge within 15 days.

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