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ISLAMABAD: A parliamentary panel while expressing serious concerns over “exorbitant” taxes levied on consumers, including the areas and consumers who do not come under the ambit of filing tax returns, directed the Pakistan Telecom Authority (PTA) and the Federal Board of Revenue (FBR) to formulate a comprehensive strategy for the benefit of mobile users.

The National Assembly Standing Committee on Cabinet Secretariat met with Kishwar Zehra in the chair here on Wednesday.

The committee discussed the question of Member National Assembly Murtaza Javed Abbasi, which was sent to the committee by the National Assembly, while expressing reservations over the taxes levied on mobile cards.

The committee said that the taxes levied on mobile cards are very high and the withholding tax is also levied on poor consumers who do not come under the ambit of filing tax returns.

The committee further said that mobile cards are also taxed from consumers in the areas, which are exempted from taxes by the government. The committee directed the Pakistan Telecom Authority (PTA) and the Federal Board of Revenue (FBR) to formulate a comprehensive strategy for the benefit of mobile users.

The committee expressed dissatisfaction over the response given by the PTA and the FBR regarding the facilities provided to mobile users and taxes levied on mobile cards and issuance of fake SIMs.

Further the committee summoned the chairman PTA, the chairman FBR, Nadra and FIA to the next meeting.

The PTA member informed the committee that the imposition of tax on mobile cards falls under the purview of the FBR.

The PTA issues licenses to mobile phone companies and oversees mobile phone companies to ensure uninterrupted service delivery to customers.

He further informed the committee that in areas where mobile companies cannot provide service, mobile phone service is provided under the USF fund.

Informing about the taxes levied on mobile phones, the FBR spokesperson said that 16 percent federal excise duty is levied on consumers on mobile phone cards in the federal area, while 19.5 percent cell tax is levied in the provinces. In addition, holding tax is also levied.

Mobile users are subject to 11 percent holding and 19.5 percent general sales tax, said Murtaza Javed Abbasi.

Taxes are also being collected from those who do not comer under the tax net, said Abbasi adding that, the PTA has not protected the rights of mobile users.

Mobile users get a balance of Rs61 on loading a Rs100 card, said Abbasi.

Khawar Siddique Khokhar, member PTA said that taxes on mobile balances are levied by the Federal Board of Revenue (FBR).

Telecom taxes do not fall under the purview of the PTA, he added.

The PTA official further informed that 10 percent withholding tax general and 19.5 percent sales tax on mobile balance is being deducted.

The federal excise duty is 16 percent.

It also deducts general sales tax and federal excise duty on mobile balance usage.

The PTA informed that Pakistan has the lowest mobile tariff in the region.

If taxes are to be reduced, that is the prerogative of the government and the FBR, said member PTA.

The FBR official informed that sales tax is collected by the provinces and the federal excise duty is collected by the federation.

By law, mobile companies are subject to profit tax, but no mobile company is profitable, said the FBR official.

How can it be that companies are in deficit and they are still operating? Asked Abbasi.

Tax is being taken from the consumer. Companies are not paying any tax. Workers are being taxed. Companies do not pay any tax, said Abbasi, adding that mobile companies do not show their profits.

If committee fails to bring the chairman PTA, then what will be the solution of their problems, he added. Despite the biometrics, there are five SIMs in people’s names and people do not even know it, said Mohsin Dawar.

The PTA official said that anyone can check how many SIMs are in his/her name by sending an SMS to 668.

Responding to a question from the committee members regarding tax collection from mobile phone companies, the FBR spokesperson said that according to the tax returns submitted by the companies, all the companies were in deficit and only consumers were taxed.

The committee expressed dissatisfaction that the tax returns submitted by the mobile companies are fake and the FBR also does not investigate the tax returns of these companies.

The committee also discussed the Civil Servants Amendment Bill, 2001 and adjourned the proposed bill till the next meeting of the Committee.

Member National Assembly Ali Gohar Khan’s bill which was sent to the committee by the National Assembly, Federal Employees’ Benevolent Fund and Group Insurance Amendment Bill, 2021 was discussed.

The secretary Establishment apprised the committee of the motives of the bill.

The Committee adjourned the bill till the next meeting for further consideration.

Copyright Business Recorder, 2021

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