Supreme Court restores tax collection on mobile phone cards

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Supreme Court of Pakistan has restored tax collection on mobile phone cards, saying the apex court will not interfere in this matter.

A three-member bench of the apex court, headed by Chief Justice Asif Saeed Khan Khosa, heard the case pertaining to advance tax on cellphone cards.

The apex court in June 2018 had suspended tax collection on mobile cards.

The then Chief justice of Pakistan (CJP) Mian Saqib Nisar had taken notice of the high levy charged on mobile phone cards in the country as he asked under which law Rs 40 were being deducted from Rs 100 mobile cards.

At that time, as per some reports, on the charge of a Rs 100 pre-paid mobile card, a 19.5 percent Federal Excise Duty (FED) was charged along with 12.5 percent withholding tax and 10 percent service/maintenance charge.

According to statistics revealed by the Pakistan Telecommunication Authority in January last year, the number of mobile phone users stands at 144 million as compared to 142.5 million in October 2017.

The Supreme Court (SC) on Monday asked if every citizen is able to pay tax and if a cart man would go to the Income Tax Commissioner to get refund on mobile phone card he had loaded.

The SC observed that the government should act honestly on the tax matters and stressed that tax procedures should be made easy for citizens so that it could be determined by identity cards as to who was a taxpayer and who was not.

The chief justice asked how many people demand refund of advance tax as they have to see when and how much tax would be applicable. He remarked that the court would also have to consider whether the government enforced the law correctly or not.

A huge amount was withdrawn from the pockets of masses due to the law. On a court query, Attorney General for Pakistan Anwar Mansoor Khan said every client pay advance tax on a mobile card and a consumer on whom income tax was not applicable could demand a refund.

The counsel for Pakistan Telecommunication Authority (PTA) said Rs90 billion tax was not collected due to suspension of one point of tax collection law by the apex court.

The chief justice responded that the court could void a law but it could not suspend a law. Justice Qazi Faez Isa remarked that the court would also have to review utility tax along with income tax.

Justice Ijazul Ahsan remarked that the court had only suspended the recovery of withholding tax but not suspended the law. According to law if a person was not applicable of tax, he would have to get a certificate from Commissioner Income Tax, he added.

He remarked that the state should be sincere with its citizens. He remarked that advance tax was income tax according to definition and how a consumer could pay tax who did not fall in the category of taxpayer.

He remarked that the court wanted that the government should form such a mechanism that non-filers should not have to pay the tax. 

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