SUNDAY SEPTEMBER 23: Pre-paid cards: FBR working out policy on GST paid stamp

KARACHI: Federal Board of Revenue (FBR), on the directives of the Supreme Court of Pakistan, is engaged in preparing policy under which, all the pre-paid cards must have GST paid stamp and a serial number and FBR has to be provided record of the total number of cards issued by the companies along-with their serial numbers.
This is indeed a very important reform which would generate additional revenue of at least Rs 300 billion, which is 15 percent of the total revenue collected by FBR in 2011, according to the calculation made by Transparency International Pakistan.
Needless to mention that through a letter on August 13, Transparency International Pakistan had requested FBR to make a policy, and direct all cellular companies, PTCL, wireless phone and internet providers to get the pre-paid cards stamped as GST collected, and numbered by FBR prior to sale.
These companies shall deposit 19.5 percent GST when they take delivery of pre-paid cards duly stamped and numbered by FBR. On a copy of this letter sent by Transparency International Pakistan to the Supreme Court of Pakistan, the apex court had directed FBR to prepare a report to devise policies with respect to imposing GST on pre-paid cards, and submit the same on October 4.
Transparency International Pakistan had also requested FBR to collect 10 percent WHT at the same time while collecting GST under the new system which would enable FBR to collect revenue at-least 4-5 months ahead compared to the present system and also zero tolerance for pilferage which was estimated by Transparency International Pakistan to the extent of about Rs 226 billion and also impose income tax on the alleged un-declared revenue of these companies.
The revised procedure, if implemented, would have adverse impact of cash flows of cellular phone companies and create further hardship in times when margins for these companies have seriously eroded, said an industry executive, when contacted by this newspaper.