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CellPHONE use will be more costly now. The finance minister announced this in his budget speech in the National Assembly. He said that withholding tax on cellphone recharge/load will be increased from 10pc to 15pc. With this action, mostly pre-paid subscribers would be affected.

Suppose if they go for recharge/load of Rs100, after deduction they will get half of it.

They will have to pay 15pc WHT, Federal Excise Duty 19.50pc which becomes collectively 34.50pc. Hence, net balance available will be Rs65.50 after deduction. This is not the end -- if we add a further 7pc for the cellular company’s charges, the amount will become Rs58.50 only.

Why the finance minister increased this tax is quite obvious. It is being deducted at the source. No need to identify tax payers to bring them in the tax paying net.

It is also possible that cellular companies would take this headache to deduct and submit it to the FBR. No documentation is required for it from the end user.

Both subscribers and cellular companies should protest on this unjust decision. With this decision people will use cellphones with caution. Because of this there are chances of drop in the income of companies. Also there will be a remarkable drop in revenue from this sector.

Using cellular phones and making calls is not a luxury. It is a basic necessity to communicate with each other. There should be a valid reason for the increase.

People will understand if you increase tax on cigars, cigarettes, betel nuts and betel leaves, as they are hazardous to health. But why on telecommunications!


Comments (3) Closed

bina Jun 28, 2013 12:40pm

people have started considering cell phone as only source of entertainment....

umar shahzad Jun 28, 2013 04:50pm

tax on telecommunication sector is not better. they are implying taxes on prepaid users and in the category of prepaid users there are more than 90% people who belongs to poor class and do not qualify for tax bracket.

havi Jun 29, 2013 09:36am

There's a little benefit to enforce more taxes on cell phone however it's worthy and justifiable to tax more on cigars, and cigarettes like first world did. Gutka, betel nuts and leaves are other sources. It's more worthy to tax movie tickets, video watchers on video, beach goers and such luxury items and entertainments. It's more worthy to expand tax net,to end corruption because there is more meat there. You have to pinch those cows can deliver more milk where you have miss the boat