KARACHI: Federal Bureau of Revenue (FBR) on Saturday has submitted in SCP its response apropos composition of taxes deducted from mobile pre-paid top-up cards.
It is pertinent to remind the readers here that SCP has ordered FBR, federal and provincial governments on 8th of May to inform why 42% worth of card was being deducted on mobile prepaid cards.
The apex court took notice of public complaints that high amount of tax and other charges were being deducted from the topping up of the balance through mobile easy load and calling cards besides taxing the calls.
It had been told that 5.5 percent was deducted as a withholding tax, 19pc as sales tax and another 10pc as services charges.
FBR, attempting to justify the levying of withholding taxes on recharging, held that due to a lack of documentation of economic transactions in developing countries, the tax base and revenue collection is low, which is why withholding taxes are the main source to broaden the tax base and generate revenue. A person has the right to claim a refund if his annual tax liability is less than the tax withheld.
FBR went on to claim that the same modus operandi was prevalent in many countries and taxes were lower than many countries.
Relevant piece published earlier: SC, taking suo motu notice of huge deductions of prepaid billing as tax by mobile companies, has issued a notice to FBR, cellular concerns and Attorney General of Pakistan here today.
CJP wants Attorney General of Pakistan to explain as to how much and what amount is being deducted or taxed on a calling card/easy load of Rs100.
According to details the three-judge bench headed by CJP, while noting a large number of complaints from people in this respect, has fixed the hearing on 8th of May.
