SC suspends recovery of taxes on mobile recharge

LAHORE, Jun 11: The Supreme Court (SC) on Monday suspended recovery of Withholding Tax, Excise Duty and service charges on mobile-phone recharge.

The court gave two-day deadline for implementation of the orders.

The three-member bench, headed by Chief Justice Mian Saqib Nisar, passed the orders while hearing suo motu notice over deduction of high tax/other charges by mobile companies in Pakistan.

During the proceedings, Chairman Federal Board of Revenue (FBR) Tariq Pasha appeared before the bench and submitted that recovery of service charges on mobile calls was personal act of the companies.

He further submitted that 130 million people use mobile phones across the country whereas only five per cent people pay taxes.

At this, the chief justice observed that ordinary cellphone users were being looted due to taxation measures in place. How tax could be recovered from persons who did not fall under the tax net, he questioned. To which, the FBR chairman submitted that there was no system to identify taxpayers and non-taxpayers.

The chief justice remarked that a pushcart vendor uses mobile phone nowadays. How he falls under the tax net, he asked.

The chief justice further remarked that non-differentiation of taxpayer and non-taxpayer was a discriminatory behaviour and a policy based on discrimination could be set aside, under the Constitution.

The bench, suspending the said taxes and charges till further orders, directed the FBR to frame a comprehensive policy for recovery of taxes on mobile recharge. (APP)