Pakistan Ordered to Drop Mobile Charge Taxes

June 12, 2018 Taxation in Pakistan

Mobile charge PakistanISLAMABAD – Mobile top-ups may go untaxed in Pakistan, if only temporarily.

On June 11th the Supreme Court of Pakistan ordered that all tax withheld from the sale of mobile phone recharge and top-up cards be stopped, at least temporarily.

The judges remarked that currently, the sale of mobile charge cards carries too heavy a tax burden, as approximately 42 percent of the value of a PKR 100 charge card actually ends up as taxes.

Approximately 19.5 percent of the total tax load is made up of Federal Excise Duties, another 12.5 percent goes towards Withholding Tax, and another 10 percent becomes service and maintenance charges.

The judges ordered that a new comprehensive taxation plan be devised for mobile charge cards, in lieu of the current system.

Phone companies and tax authorities have a two-day deadline in which to implement the new untaxed system.

It was added that mobile charge cards should not be taxed at all, and, instead, the tax burden should fall on users who exceed pre-set usage limits on their phones, a move which may ensure that the taxes fall only on the most affluent and avid phone users.