The Ministry of Finance and Revenue has stated that consumers of cellular phone companies are charged only once i.e. at the time of payment of the card.
Shazia Marri, MNA from PPP, raised a question in the Parliament asking whether it is a fact that consumers of cellular phone companies are charged different taxes/duties/levies/fees etc. twice, once at the time of recharge of any amount and second at the time of making calls or subscribing different packages by using the same credit.
The Finance Ministry stated that consumers/users of Mobile Phones do not pay tax twice i.e. at the time of recharge of balance and on making call/activation of packages.
The tax is charged only once on the amount of recharge. The message the user receives at the end of a call is in fact a breakup of already paid taxes in accordance with minutes of the call which is an effort by phone companies to become more transparent.
Such messages do not mean that the overall payment of taxes can exceed the taxes levied which remain fixed in relation to the amount of bill.
For the sake of clarification the breakup of taxes on Mobile phones is given below:
- Phone bill
- Provincial Sales Tax
- Income Tax @ 12.5% of bill Since the provincial Sales Tax is not applicable in ICT, therefore to ensure price equalization Federal Excise Duty (FED) is charged on the said amount.
The Income Tax charged is adjustable against the annual tax liability of a person. Such advance Income Tax has also been upheld by the Supreme Court in its recent judgment.