FBR files its reply in suo motu notice on tax deduction on mobile card

ISLAMABAD - Federal Board of Revenue (FBR) has filed its reply in Supreme Court (SC) in respect of suo motu notice regarding tax deduction on mobile card calling card.

The FBR has said in its reply that despite levying of the tax, use of mobile phone in Pakistan is cheaper than several other countries in the world and ratio of taxes on mobile consumers is lower than Bangladesh, Malaysia, Turkey, Thailand, and Indonesia.

FBR has said in its written reply that several kinds of fees, levies, and other charges are received from mobile phone users in other countries. Under the head of withholding tax, a sum of Rs 4 billion to 4.5 billion is deducted from mobile phone users monthly.

According to FBR, a sum of Rs 51 billion was deducted against withholding tax from the mobile phone users during the financial year 2016-17. The taxes ratio was scaled down gradually keeping in view the problems facing the mobile phone users.

As per FBR, tax ratio stood at 15 percent during 2013-14 and it comes to 12.5 percent during 2017-18. Federal excise duty on a mobile phone was reduced to 17 percent. Overall Rs 944 billion are collected annually under the head of withholding tax. Rs 944 billion constitute 70 percent of direct tax collection.

FBR said in its reply that Rs 1393 billion were collected under direct tax during the fiscal year 2016-17. Deduction under withholding tax from users constitutes 5.5 percent of the total collection. Advance withholding tax is deposited in the account of the mobile phone user.

The mobile phone user can get refund advance withholding tax through fiscal year returns.-Online