SC freezes tax deduction on prepaid mobile phone cards

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Pakistan’s Supreme Court (SC) on Monday ordered a suspension of the tax deduction on prepaid mobile phone cards.

Pakistan’s Chief Justice Justice Mian Saqib Nisar was leading a three-member bench in a suo motu case over an increase in taxes on prepaid scratch cards at the Lahore Registry of the Supreme Court.

Chief Justice Saqib Nisar ordered the suspension of the tax increase and gave authorities two days to implement the court orders. He further called on the authorities to draft a comprehensive policy regarding the deduction of taxes on the use of mobile phones.

Judge Saqib Nisar said: “Taxes should be levied on users whose cell phone use exceeds the set limit.

“Service providers and the Federal Bureau of Revenue (FBR) charge taxes on prepaid scratch cards and loot people.” noted the bench judges.

“How are taxes billed to those outside the tax network? The bench asked the president of the FBR.

The bench further stated: “It is illegal for Rs 64.38 to be charged as tax on a Rs 100 prepaid scratch card.”

Judge Ijazul Hasan asked the chairman of the FBR: “How can you levy taxes on a peddler? “

Earlier last month, the CJP ordered the federal and provincial governments and the RBF to respond to the reasons why so many taxes were being deducted on prepaid scratch cards.


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