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SC suspends tax deductions on prepaid cellphone top-up cards

With latest tech updates, the Supreme Court (SC) has suspended all deduction of taxes imposed on the top-up of prepaid cards by cellphone service providers nationwide along with the Federal Board of Revenue (FBR), giving both institutions 2 days to act on the orders.

A three-judge bench comprising Chief Justice of Pakistan Mian Saqib Nisar, Justice Ijazul Ahsan and Justice Umar Ata Bandial, was hearing the case at the SC Lahore registry.

The court, when it was told earlier that for every cellular charge, 5.5 per cent was deducted as a withholding tax, 19pc as sales tax and another 10pc as services charges, had described the deductions as exploitative and illegal.

The court observed today that ordinary cellphone users were “being looted” due to the taxation measures in place on prepaid cards.

“How can you ask a pushcart vendor to pay taxes?” Justice Ahsan asked. “If someone doesn’t fall into the tax net, how can taxes be imposed on them?”

“It is unlawful that on a Rs100 prepaid card, only Rs64.38 is acquired,” Justice Ahsan said.

The chief justice said that only people whose cellphone usage crosses certain limits should be taxed.

The top judge said that a comprehensive policy should be formulated on taxes imposed on prepaid cellphone cards.

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