How can we collect mobile phone taxes from a labourer, asks CJP

May 8, 2018

Chief Justice of Pakistan, Justice Saqib Nisar, ordered all cellular phone companies and relevant government authorities to file a report on 42% tax deduction from mobile phones pre-paid calling cards and ‘easy-load’.

The CJP, heading a four-judge bench, ordered this while hearing a suo motu notice he took the notice earlier this month about high tax deduction.

During the hearing, Attorney General Syed Ashtar Ausaf Ali submitted details of taxes on cellular services consumers.

He told the court that cell phone companies are charging 19.5% sales tax, 10% service charges and 12.5% withholding tax (WHT) from customers on recharge of Rs.100 calling cards or ‘easy-load’.

The tax details irked Chief Justice Saqib Nisar, who raised many questions:

> Why withholding tax has been levied on consumers?

> Mobile tax is not equally applicable on all 140 million consumers, then why are they being charged, and under which law?

> Why sales tax has been imposed after recovery of withholding tax?

“Such taxes cannot be levied on a labourer who earns just hundred rupees a day. How can we collect withholding taxes from daily wager?” he added.

The Attorney General said provinces collect the taxes, adding that “only mobile phone companies can respond on service charges.”

The CJP directed all cell phone companies, Federal Board of Revenue, federal government and all provincial governments to file their response on the tax within two weeks.

The top judge also hinted at taking suo motu notice of taxes on petrol and diesel.