Supreme Court restores all taxes on mobile phone top-ups

The Supreme Court has just restored all the previous taxes on mobile cards, according to local media reports. In simple words, it means that now Rs. 100 card will not credit for Rs. 100 to your mobile account. Mobile operators will again start deducting a significant amount of taxes as they were doing previously.

Chief Justice of Pakistan, Justice Asif Saeed Khosa while reading the short order released today, said that the supreme court will not interfere in the matters of public revenue and tax collection system. The three-member bench of the apex court also included Justice Azmat Saeed and Justice Qazi Faez Isa to give the final verdict.

After a long period of 10 months, the Supreme Court has withdrawn its previous stay order issued on 12th of June last year which suspended all taxes on mobile phones top-up cards.

Previously, after the court’s order, cellular operators decided to suspend all taxes on mobile phone recharge through pre-paid scratch cards. Federal Board of Revenue (FBR) was asked to devise a new mechanism regarding tax deduction on mobile phone recharge after consultation with mobile operators.

Recently, PTA has told the apex court that Rs. 90 billion tax was not collected due to the suspension of tax collection law. At this point, the chief justice remarked 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that the government enforce the relevant law correctly and justly since a considerable amount of money was being withdrawn from the masses because of this law.

As the Supreme Court will now refrain from interfering in taxation matters, the telecom operators are expected to charge as much as Rs. 40 on Rs. 100 cards. Before the suspension of tax on mobile top-ups, the consumers were paying 42% tax, including 19.5% FED, 12.5% WHT and 10% service/maintenance charges on every Rs. 100 card.