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Use of cellphones to be costlier

June 28, 2013

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!