The payphone card operators have moved a budget proposal to the Central Board of Revenue (CBR) demanding total withdrawal of withholding tax from all telecom services along with inclusion of specific provisions to eliminate arbitrary and unilateral interpretation of tax laws by the tax managers.
The association through the proposal has contested placement of the payphone card operators within the ambit of section 236(1)(b) of the Income Tax Ordinance 2001.
Sources in the CBR said here on Monday that the proposal would be examined as part of ongoing exercise to simplify the tax laws in the coming budget.
The Association of Payphone Card Operators (ACPO) has asked the Finance Minister to accommodate its legitimate concerns in the upcoming budget so as to strengthen this segment of telecom sector benefiting a large low income population of the country.
The association president Humayun Nabi Jan has sought complete removal of withholding tax from all telecom services, and inclusion of specific provisions to eliminate arbitrary and unilateral interpretation of law by the tax officials.
The row between the CBR and the association started on bringing the association within the ambit of section 236(1)(b) of the Income Tax Ordinance 2001. The association approached Sindh High Court which asked CBR officials not to harass members of the association.
The association has also pleaded for treating all equipment imported for telecommunication sector at par with IT equipment ie complete exemption from custom duty, sales tax and withholding tax.
Similarly indigenously produced information and communication technology equipment should also be treated under the proposed exemption regime.
Jan said it is strange that mobile phone sets primarily used by upper middle and affluent class of the society are completely exempted from import duties and GST while payphone exclusively used by the common man is effectively taxed at the rate of 53 percent on import.