August 20, 2018

Top court suspends ‘exorbitant’ tax on prepaid mobile bills

News Source: Express Tribune

Writer: Muhammad Haroon

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.”

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.

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.

 

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