Pakistan imposes 5% additional tax on telecom services

- Pakistani

Recently, Pakistan has announced to increase the tax rate on telecom services, by 5 percent from July 1st, 2013.

The Finance Minister, Mr. Ishaq Dar, explains that all telecom users will now have to pay 15 percent withholding tax, which was previously 10 percent for last many years.
No doubt this is a heavy increment in tax for telecom users. Earlier, a heavy tax has imposed on overseas Pakistanis to call to their homeland Pakistan. Now Pakistanis have to face another troubled scenario of heavy tax on telecom services.

Here is a brief description of taxes on cellular services. After these increments in WHT (without holding tax), taxes on cellular services are as following:

  • WHT: 15 percent
  • FED: 19.5 percent
  • Total: 34.5 percent

In addition to these government taxes, every cellular operator in Pakistan deducts 7 percent service charges.  In this way every user has to pay 42% in taxes and charges.

With the load of Rs100 card, a customer will be taxed according to following criteria:

  • Initial Load: Rs. 100
  • Amount after WHT (15 percent): Rs. 85
  • Amount after Cellular Charges (7 percent): Rs. 78

With the card of Rs. 100 card, a customer will be left with Rs. 78 of credit for use. Out of Rs. 78, another 19.5 percent of FED is also deducted.

  • So Amount After FED Collection is (19.5 Percent): 58.5

In this scenario a customer will have to pay Rs. 41.5 out of Rs. 100 in the name of taxes and service charges.

After this any one can imagine that how government is collecting heavy taxes from telecom users.

Every Pakistani will have to suffer a lot with the use of mobile phone that has become a need of every one.