'Unworkable': Telecom industry rubbishes additional tax on mobile phone calls

ISLAMABAD: The telecom industry has rubbished the imposition of Rs0.75 additional tax by the federal government on mobile phone calls longer than 5 minutes, ARY News reported on Saturday.

The telecom industry has termed it ‘unworkable’ to impose the additional tax of Rs0.75 on mobile phone calls longer than five minutes as it will create difficulties for the prepaid consumers who are having bundle offers of different cellular companies.

It expressed suspicions that the application of additional tax will pave the way for ending bundle offers by the companies, whereas, the callers can save themselves from being charged additional tax by ending their phone calls before five minutes, leaving nothing for the government.

The industry clarified that the additional tax will not only complicate operations of the telecom operators but also create troubles for the nationals.

On the other hand, sources within the telecom industry told ARY News that the application of the increased tax will be imposed on longer mobile phone calls from July 1 following its approval in the federal budget 2021-22.

It may be noted here that consumers were already paying Rs1.97 per five-minute mobile phone calls under the previous taxes including 19.5 per cent FED and others. The additional tax will increase the price of over five-minute call up to Rs2.72.

READ: GOVT NOTIFIES TAX ON MOBILE PHONE CALLS LASTING MORE THAN 5 MINUTES

Sources added that the rates of prepaid packages will be hiked after the decision, directly impacting most of the low-income citizens as they will have to pay an additional tax of up to 6.5 per cent on above five-minute call.

It was learnt that only 2.9 million people were income tax filers, whereas, less than half of the filers used to adjust their tax on mobile phone calls. The tax hike on mobile phone calls will increase the demand for WhatsApp, Facebook Messenger and other internet calling apps.

Earlier on Friday, the federal government had notified the imposition of a tax on mobile phone calls lasting more than five minutes.

According to a notification issued on Friday, speaking over your mobile for more than five minutes will be taxed at 75 paisas.

Currently, the PTA is charging 32 paisas GST and 20 paisas Withholding Tax (WHT) on mobile phone services, whereas, the cellular companies currently charging 33 paisas on 60 seconds calls.

Finance Minister Shaukat Tarin had made the announcement of the mobile phone call tax on Friday while winding up the budget discussion in the National Assembly (NA).