Political parties, religious forces and the civil society condemned the recent imposition of a lavish tax-estimated at 42 percent-on mobile card loads, declaring it a great injustice on the nation and in particular the poor and white collared classes.
Talking exclusively to Pakistan Today, former member of National Assembly (MNA) from Pakistan People’s Party (PPP) Yasmin Rehman said the present government had made the taxation system more complex and tedious for the general public.
She noted that the telecommunication industry was the only industry that was booming across the country despite terrorism, with investments continuing to flow inside the country. However, she said the government decision of increasing tax on the sector would have negative impacts on the sole growing sector.
Rehman said those who were already paying taxes had been loaded with the burden of more taxes without focusing on adding new people into the tax net.
A person who is already paying tax on his income, and paying general sales tax also would not want to pay an additional 42 percent on loading mobile cards, she said. “The move is completely illogical,” she stated.
Elaborating further, Rehman said rather than expanding tax net to new sectors like agriculture, industries and other stakeholders, the government had doubled tax burden on people who were already paying their taxes.
All over the world taxes are initiated at a slow pace with nominal rates, said the former MNA. “Imposing a sudden tax of 40 percent is unethical and is an injustice with the nation. This would force investors to revise their decision of investing in Pakistan,” she viewed.
She said when an investor would have to pay 40 percent tax to the government after collecting it from consumers alongside other taxes, he would think a hundred times prior to investing in Pakistan’s telecom sector.
“This happens nowhere,” she said, adding that poor people would now be forced to pay taxes against their will for possessing the gadget they use for staying connected with their family, and meeting their business commitments.
Liaqat Baloch, renowned leader from Jamat-e-Islami (JI), said the federal budget was a mere tax burst, destroying poverty-ridden people.
In the name of revenue generation people are being deprived of a facility they had been availing earlier, he stated.
Mobile phones are not only used for staying in touch with friends and family, Baloch said, but are also an essential part of running any business activity. “Imposition of 42 percent tax on loading mobile cards would destroy business activities,” Baloch opined.
He said the budget had uncovered the reality behind the so-called people-friendly government of Nawaz Sharif.
Syed Zafar Ali Shah from Pakistan Muslim League-Nawaz (PML-N) expressed his lack of knowledge on the issue and said he did not have sufficient details at the moment and will meet Federal Finance Minister Ishaq Dar on Monday to get further details.
Dr Ferzana Bari, a civil and human rights activist and renowned social worker, said the decision would force investors in the telecom sector to windup their businesses and to move to some other country where they could earn and facilitate people, which was a free market concept.
Millions of Pakistanis use cellular phones and a majority of them come from poor or white collared classes who spend Rs 200 on talk time for the entire month, she said.
The government, she said, was victimising them. “It is not an indicator of prosperity to have a mobile phone but it is more of a need that the poor class is being deprived off,” she added.
She was of the view that 60 percent Pakistanis are living below the poverty line and owning a mobile phone did not push them above the poverty line.
According to Finance Minister Ishaq Dar, all telecom users will now have to pay 15 percent withholding tax (WHT), which had previously been settled at 10 percent for the past many years. Dar said the proposal had been incorporated into the Finance Bill after consultations with concerned stakeholders.
After this increase in WHT, taxes on cellular services are as follows:
WHT: 15 percent
FED: 19.5 percent
Total: 34.5 percent
In addition to these government taxes, every cellular operator in the country deducts 7 percent service charges as well.
Therefore, almost 42% of total load will go to taxes and charges
A customer loading Rs 100 mobile card will be taxed as follows:
Initial load: Rs. 100
Remaining amount after WHT (15 percent): Rs. 85
Remaining amount after cellular charges (7 percent): Rs. 78
After loading a Rs. 100 card, a customer will be left with Rs 78 of credit for airtime usage. Out of Rs 78, another 19.5 percent in FED is also deducted.
Remaining amount after FED collection (19.5 Percent): 58.5
Hence, a customer will have to pay Rs 41.5 out of Rs 100 in taxes and service charges.
Analysts believe the move is not well thought out, as taxing the most taxed sector can backfire and may hit annual collections made through taxing the telecom sector.
Tax it if it moves, tax it if it doesn`t but don't tax the rich in Pakistan.
Bugtho panjabio bugtho.Agar ganje ko vote na dete tho aj ye din na dekna parta.
You must expect that sort of taxation from this outstanding finance minister of PML-N.
Those who voted for PML N are responsible for this and they should be reminded of this repeatedly.
Shair ko vote deny walo Shaiirrrrrrrrrrrrrrrr BANO
THIS WILL ONLY BENEFIT EITSLAT THE DEFAULTERS IN PAYING THEIR DUES.CONSUMER WILL RUN FOR THEIR PACKAGES WHO WILL STILL INCREASE FOR PROFITS COMING FROM BLUES.THEY WILL NOT PAY THEIR DUES
LOFAR SA LAFANGA SA
GANJYAAN KOLU CHANGA SA.
olny dictorship is the solution for pakistan.
all parties have their own goals . they do not work for country. i am requesting the armed forces to take an action and protect the public from injustice, inflation , poverty, and unemployement and arrest these corrupted peoples
Do you know we have had Dictatorship always? The difference is that the one in uniform cares for the people but the one without uniform cares for itself and the Party because they feel people are with them since they voted them in and till next elections people are not important.Yeh iss jamhuriat ki khubsurti hay.My foot.
Pre pay phones are used by people who cant afford to have monthly tariffs! Taxing them is taxing the lower part of society. Anywhere in the world GST or VAT is applied uniform way to service and non edible items. If GST is 17.5% then rest is just money making scam by in efficient government!
The crux is they want to push people in to 80s when only few could afford a mobile phone due to cost! They want this to be only rich gadget, Sharifs dont want a gardener or servant to have a mobile or they want to push people back to landlines so Middle east owner of PTCL can flourish!
Turkish protested beacause they did not want govt to change a monument. Brazillians started protesting only because the govt increased their bus fares.
Pakistanis are suffereing from load shedding, inflation, corruption, injustice etc yet they continue to praise ppl like nawaz sharif and zardari. This nation is deep asleep.
High taxes for economical uplift,must be applied on luxurious items,note on public needs.raise in call rate impact busness,social system and specially the poor.
Nawaz lala kuch tho khayal karo.gharibon kind pehly se east lagi he.baba paisa kamana he tho fruit import band karao.gharibi mehsoos karo.baatoon ke sheroo ab de sakty ho koi farmula.
Ganja Tax imposed on Pakistanies by Nawaz Shareef(NAJA TIND)
This tax will go into pockets of Nawaz and Shahbaz Sharif. Their industrial empire will flourish. This is the biggest corruption by Sharifs. Sharifs are the most corrupt rulers in history of Pakistan.
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