Cellular Subscribers Pay 30% Taxes, But Why? [LTE]

Today we got a letter from annoyed telecom user. She insisted us not to reveal her real name or writing, instead, she wanted us to highlight this issue for her and millions of other cellular customers.

Letter said that this cellular subscriber is using a post paid connection, which costs her Rs. 2,000 as monthly rental fee. But, after adding taxes she has to pay over or around Rs. 2,650 each month. Here’s how she calculated her taxes:

  • Monthly Rental: Rs. 2,000
  • Sales Tax (19.5 percent): Rs. 390
  • Withholding Tax (10 percent after adding sales tax): 239
  • Total Bill: Rs. 2,629

Now, she’s paying additional Rs. 629, on average, every month in the name of taxes. In this situation she has got 2 pleas:

Plea to Government:

When will you stop looting this country? Are you not fed up yet? What are you giving us against whatever tax you collect?

We don’t have Gas, Electricity, pure water (and yes I am talking about major cities, not the rural country side area).

Will you ever spare us from this hefty tax rate?

Plea to Cellular Companies:

All the goods we use in our life come with a price. I agree till here! But ever you heard of a home appliance, a doctor fee or anything advertised as Rs. 2,000 but ultimately you will have to pay Rs. 2,629 to buy it?

Why do you falsely advertise prices? and not communicate us rates after including all the taxes? You ever heard a term called ethics?

Thank you!

This very short letter poses very serious question marks over the the business models of government and the cellular companies.

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