FBR Received Rs. 43 billion on Account of Withholding Tax During 2014-15

Taxes are usually considered huge hurdle in the way of progress and healthy growth of any organization. Similarly, Pakistan is one of the highly telecom taxed payed country in the region. A recent survey explored by Federal Board of Revenue (FBR) that during last year, the pre-paid mobile phone users were robbed off by Rs. 40 billion, when 14% withholding tax was automatically deducted from every card recharge. This in return generated a huge amount of revenues for Federal Board of Revenue (FBR); as it received  Rs. 43 billion on account of withholding tax during 2014-15. Out of 120 million total users only 0.9 million deposited tax return claims and got back what they paid in advance.

FBR Received Rs. 43 billion on Account of Withholding Tax During 2014-15

Also Read: Huge Amount of Taxes Causing Hurdles in the Growth of Internet Industry: Wasim Ahmad

Federal Board of Revenue (FBR) in the Senate Standing Committee on IT on Monday also revealed that rest of  Rs. 40 billion was automatically seized by the government at the end of the financial year.

Pre-Paid Cell Phone Users Robbed of Rs. 40 Billion

The Federal Board of Revenue (FBR) officials also informed that on each mobile card re-charge of Rs. 100, mobile operators deducted 14% withholding tax, while 19.5% is charged as federal excise duty in capital or as provincial tax in provinces.

Answering a question of Press, the FBR officials also clarified that:

“The telecom companies and thousands of franchisers were charging the 14 percent advance tax from consumers on every recharge, but neither FBR nor Pakistan Telecommunication authority has human or technological expertise to check whether the huge advance tax collected from users was actually deposited in national exchequer or not. There is a possibility that instead of going to national kitty, this huge sum land in the pockets of mobile phone companies, chief withholding tax.”

Senators Rehman Malik and Osman Saifullah Khan asked thought provoking questions regarding the role of Ministry of IT in rationalizing taxes on mobile users and decreasing state of IT in the Pakistan, whereas the IT industry of neighboring countries in the region like India and China is growing greatly and achieving top slot in the world ranking in IT sector and contributing to well to their national economies. As Rehman Malik said:

“Why India is on top, but we are nowhere in IT, we should admit at government level, facilitation is not there.”

The committee members actually considered the Ministry of IT responsible for the imposition of irrational taxes.

Also Read: Punjab Government Again Finally Withdraws Recently Imposed 19.5% Internet Tax

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