Karachi, August 6, 2023 – In a recent development, the Federal Board of Revenue (FBR) has imposed a 15 percent income tax on the sale price of prepaid phone cards.
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Phone calls above 5 minutes to be chargeable additional 75 paisa
ISLAMABAD: The government has imposed additional 75 paisas as federal excise duty (FED) on a mobile phone call if its duration exceeds five minutes.
The national assembly approved the changes in the law after the Federal Board of Revenue (FBR) will collect additional 75 paisa FED on a call above five minutes.
According to the law, mobile phone call, if call duration exceeds five minutes; seventy five paisa per call in addition to the applicable rate of duty.
The additional federal excise duty on mobile phone calls above five minutes shall be applicable from July 01, 2021.
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How much a phone call will cost after new tax?
Persons making calls through their cell phones will cost 38 percent more following the implementation of proposed change in tax rate effective from July 01, 2021.
The government has proposed one rupee additional burden on a phone call having duration above five minutes. This was announced by Finance Minister Shaukat Tarin a day earlier at the Senate.
In fact the finance minister announced to reduce the tax burden as compared with the actual proposals announced through the Finance Bill 2021 that was additional tax on a call having duration above three minutes.
According to sources in telecom industry the existing call rate of duration above five minutes is Rs1.97, which also included 19.5 percent federal excise duty. However, with the implementation of proposed rates the call above five minutes will cost Rs2.72.
The telecom industry believes the proposed changes in taxation of call rates are not possible to implement.
Industry sources said that the proposed taxes are un-implementable as the charging structure is not linear and is based on bundle offers to facilitate prepaid users which account for 98 per cent of overall cellular subscribers in Pakistan.
This regressive move will play havoc with the prepaid bundles being enjoyed by the lowest segment of society as the operators will be constrained to remove such offerings, making voice calling significantly more expensive.
In addition, users will quickly learn to redial before 5 minutes to defeat this proposed levy hence it may bring nothing to the government but add to the complexity for the telecom sector and operators while causing massive inconvenience to the citizens.