Withholding tax on mobile recharge increased to 15pc

The increase in withholding tax will generate Rs43bn in additional tax revenue for the govt

ISLAMABAD: Cellular Mobile Operators (CMOs) on Tuesday, announced the implementation of revised withholding tax rates on mobile balance recharge. 

According to text messages sent by the CMOs to customers, withholding tax has been revised upward to 15 per cent or Rs13.04, from its earlier level of 10 per cent or Rs9.1 on every Rs100 worth of mobile balance recharge.

Estimates suggest that by revising the withholding tax rate from 10 per cent to 15 per cent, the government will raise additional tax revenue worth Rs43 billion per year. 

In addition to the withholding tax, General Sales Tax (GST) at 19.5 per cent is also being charged on mobile services, after which the customers will get Rs72.77 worth of balance recharge of every Rs100 balance recharge that they buy. 

Recharge Value 100.00
WHT @ 15 per cent 13.04
Remaining 86.96
GST @ 19.5 per cent 14.19
Balance Remaining 72.77
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The GST is applied on a per call, SMS, and data usage basis which means that a total of Rs14.19 is deducted under GST when a user consumes their post withholding tax deduction balance of Rs86.96.

Furthermore, PTA had already fixed a ceiling on call setup charges at Rs0.15 per call.

An official of Pakistan Telecommunication Authority (PTA), while talking to Profit, stated: “ PTA is vigilant about the tariffs being charged by CMOs and action will be initiated on any reported incidence of charging above the published tariffs and applicable taxes in accordance with the law.”


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Ahmad Ahmadani
The author is a an investigative journalist at Profit. He can be reached at [email protected]


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