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No tax deduction on less than Rs500 mobile card

No tax deduction on less than Rs500 mobile card

ISLAMABAD: The Supreme Court was informed that no tax is being deducted on recharging of mobile cards of less than Rs500.

Attorney General of Pakistan Anwar Mansoor made this statement during the court hearing yesterday.

Chief Justice of Pakistan (CJP) Mian Saqib Nisar asked the attorney general about legislation to do away with surplux tax on mobile cards recharging. In his reply, the AG requested some time for materialisation of the legal cover to prevent imposition of taxes on mobile cards.

The hearing was then adjourned for indefinite period. Earlier the court had stated, “The public is being looted here. How can tax be received from a street vendor? Deduct tax from the person whose mobile phone usage is more than set limits.”

In May this year, the CJP had taken took suo motu notice of about 40% deduction on Rs 100 mobile card across all cellular networks in Pakistan. Expressing wonder on this heavy tax deduction, the CJP asked why such a huge amount is deducted by the private mobile companies and under what tax heads.

The apex court issued notices to all the mobile telephone operators in the country and summoned the attorney general over the issue. Reports say the Supreme Court will take up the case on Tuesday next week.

Under the tax, for every Rs100 pre-paid mobile phone card, the users used to get only airtime for Rs66.5 after deduction of Rs33.5 in for 14pc withholding tax and 19.5pc sales tax. Around 70pc or 98 million mobile phone users pay these taxes every time they load at the Rs100 pre-paid cards.