The cellular companies have stopped charging central and provincial taxes on pre-paid calling cards from Thursday, said the Federal Board of Revenue (FBR) sources. Chief Justice of Pakistan (CJP) Saqib Nisar had suspended the 'exorbitant tax deductions' from mobile phones pre-paid calling cards and easy load by companies and it had given a two-day deadline to the FBR to follow the orders pertaining to the suspension.
"We have checked with cellular companies and they have confirmed of stopping charging taxes on calling cards worth Rs 100," said sources. They said the new mechanism would be evolved in next 15 days that would revolve around the concept of exempting the taxpayers not falling under the category of taxable income.
The FBR sources further added that identifying the consumers not falling under the category of taxable income would be a challenge. The use of cell phones is quite prevalent in the society irrespective of the class and category, they added.
They said FBR was deducting advanced withholding tax from the cellular companies and it should not be mixed up with consumption tax which every consumer is supposed to pay. The advanced withholding tax is adjustable in the annual income of a taxpayer. Those consumers with no tax liability should be exempted from this advanced withholding tax, they added. Cellular companies deposit around Rs 5 billion under the head of advanced withholding tax. Meanwhile, the provincial authorities charge sales tax separately on the pre-paid cards.