Rs. 90 billion tax was not collected due to suspension of tax collection law, PTA informs SC

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April 23, 2019
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The primary means of filling the government coffers is a collection of taxes from the masses, which is essential for the country as a whole since those funds are used to develop healthcare, education, public amenities and generally boost revenue. However, this ultimate goal of serving the public and boosting the nation’s wellbeing also underscores an important point: taxation must never be wielded by the state to the exploit the masses or leave them worse off.

This is nowhere more relevant than in an ongoing hearing of a case pertaining to mobile phone tax in the Supreme Court of Pakistan. Ever since November 2018, under the directive of ex-Chief Justice Saqib Nisar Khosa, users of pre-paid mobile phone cards have to pay a tax, all in an attempt to raise funds for the Diamer – Bhasha dam. This mechanism might change now though, as the Supreme Court considers the flaws in this procedure.

The court has observed that is the government’s foremost obligation to act honestly with respect to tax matters and it went on to stress that taxation procedures should be made smoother and easier for citizens.

Headed by Chief Justice Asif Saeed Khan Khosa, a three-member bench of the apex court remarked upon hearing the case that the state considered the citizen in question to be under obligation to indicate whether he would pay tax or not. The chief justice also observed that it was imperative that the government enforce the relevant law correctly and justly, since a considerable amount of money was being withdrawn from the masses because of this law.

Upon the court’s query, Attorney General Anwar Mansoor Khan stated that every client pays advance tax on mobile phone cards and any user on whom income tax is not applicable can demand a refund.

Justice Ijaz Ul Ahsan also advanced arguments against the payment of advance tax by ineligible citizens, saying that the state should be sincere with the masses and that since this kind of tax essentially falls under the category of income tax, those individuals who don’t qualify for income tax should be exempt from it.

On the other hand, the total suspension of the law at this stage seems unlikely since the losses resulting from it would be immense. According to Pakistan Telecommunication Authority (PTA), Rs 90 billion tax was not collected due to suspension of the tax collection law by the apex court at one point. To this, the court said while the law could be rendered void, it would not be suspended.

For now, the hearing has been postponed till Wednesday.

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