Rs25.61 tax being deducted on Rs100 prepaid phone card, Senate body told

The chairman of the Pakistan Telecommunication Authority (PTA) and officials of the Federal Board of Revenue (FBR) on Thursday failed to answer satisfactorily questions of the Senate Standing Committee on Information Technology vis-à-vis deduction of tax on prepaid mobile cards.

As a result, the Senate Committee told the PTA and FBR officials to submit within two days the formula under which tax was being deducted on prepaid mobile cards. The committee also sought details of the money sent abroad by the telecom companies under the head of royalty.

PTA Chairman Amir Azeem Bajwa told the Senate committee that unfortunately the telecom sector was not a profitable sector in Pakistan. He however admitted that the rate of tax on telecom services in Pakistan was higher than any other country in the region. He said that all telecom operators in Pakistan except one were working under pressure. He said that a Rs25.61 tax was being deducted on a Rs100 prepaid phone card. He said that withholding tax on a Rs100 prepaid phone card is Rs11.11.

The standing committee chairman told Bajwa that there was a Rs4 difference in the amount of tax being deducted on a prepaid phone card and the calculation he gave to the committee and this difference would amount to millions of rupees.

Senator Talha Mahmood said it has been confirmed now that a Rs25.61 tax is being deducted on every Rs100 prepaid phone card. He said he would bring a privilege motion if it is proved that a higher amount is being deducted on a prepaid card. Senator Mushahidullah Khan said that people who are briefing the committee about the tax being deducted on prepaid telecom cards are ill-informed about the subject. Senator Talha Mahmood said that officials of the relevant ministry should come to the meeting with the approach that they are going to improve the system.

The Senate Committee also sought details of the USF Fund, which is meant to improve the condition of the telecom sector in Pakistan. The committee also told telecom companies to submit details of the amount, which they sent abroad through L-Series.

The PTA chairman said that Crypto AG has no link with Sandvine company and purchase of equipment from Crypto AG was stopped years now. He said that social media accounts of at least 600 people were suspended for speaking up against the Indian atrocities in occupied Kashmir and 400 of these social media accounts have yet to be restored.