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Mobile Phone Operators Deduct Only Applicable Tax Rates: PTA

Pakistan Telecommunication Authority (PTA) on Friday said that the Cellular Mobile Operators (CMOs) are deducting only applicable rates of taxes after the restoration of levies by Supreme Court of Pakistan.

In a statement, with reference to taxes applied on the recharge/reload of prepaid balance, the PTA said that the CMOs are deducting only withholding tax and general sales tax/federal excise duty on the prepaid recharge/reload after restoration of taxes by the Supreme Court of Pakistan from April 2019.

The PTA said that on the recharge of Rs200 balance provided to the user is Rs177.778 (and not Rs152 as reported on the social media) after deduction of Rs22.22 against withholding tax at 12.5 percent.

General Sales Tax at 19.5 percent is applied on per call, SMS, data usage basis or opting for any additional bundle/package.

“When a user consumes its remaining balance of Rs177.778, a total of Rs29.01 as GST is charged,” the PTA said.

In the same way, if a package is priced at Rs167 (without GST), the same, requires a prepaid balance of Rs199.56 (Price+GST=Rs167+Rs32.56). Due to lack of clarity on the deduction of GST in addition to withholding tax, mobile subscribers are assuming that CMOs are charging well above applicable taxes, which is not correct, the PTA said.

The PTA further said that it had fixed a ceiling on call setup charges at Re 0.15 per call. PTA is vigilant about the rates/tariffs being charged by CMOs and action will be initiated on any reported incidence of charging above the published tariffs and applicable taxes in accordance with the law, it added.

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