I am sure you must have heard of recent presidential ordinances, according to which withholding tax was increased by 1.5 percent, to be applicable on all services including Telecom.
Based on this ordinance, all prepaid cards and postpaid bills will be charged 11.5 percent as withholding taxes (charges deducted on card reloads)
- Deduction on Card Load = 11.5 % Withholding Tax + 5% Services Charges = Rs. 16.5
After this increase in withholding tax, total taxes on telecom services have reached to 31 percent. Following is the complete detail of taxes on Telecom services:
- Withholding Tax: 11.5 Percent
- Federal Excide Duty: 19.5 Percent
- Total Taxes: 31 percent
Just to add to the misery, all cellular companies are charging 5 percent of the credit as services charges. After these charges, total money deducted from cellular services:
- Taxes: 31 Percent
- Service Charges: 5 Percent (for prepaid only)
- Total Deduction: 36 percent
In simple words, Rs. 36 will be deducted out of every Rs. 100 card load.
This is the revenge (in true spirit) taken from the people of Pakistan by the Democracy.