Does mobile phone users in Pakistan know that how much money government forcefully snatches from him in terms of those taxes that are not applicable to him?
No, because everyone in the country is so afraid of the term “Tax” and “FBR” that no one tries to take a hint that how huge he pays every year to the government without asking for a reward. The collective amount is in billions. Yes, just last year, the government of Pakistan collected Rs. 48 billion from mobile phone users and that too with the help of little number jugglery of putting 14% withholding tax. By the way, this tax is one of many taxes on a mobile phone user which make the amount even bigger. The interesting and may be the much tricky fact is that our financial gurus at the helm of affairs including the FBR and Ministry of Finance, collect this amount from the poor public under a legal promise to return them back (adjust it) at the time of filing tax returns.
Even more interesting is the fact that this tax is collected from the people who do not fall into the taxable bracket owing to their lower income levels. And the statistics spoke for themselves when FBR furnished a report to the parliamentary committee while revealing that only Rs. 4 billion was claimed last year out of Rs. 48 billion collected amount which is merely 8% of the total. However, remaining 92% (Rs. 44 billion) was never returned to the public. In other words, the hard earned money of poor laborers and masons that they earn in very small chunks every day and which is leaked out of their pockets in shape of a tax on mobile recharge is still lying with the government. It happens every year and we are only crying over Panama and Surrey Palace.
The journey of this nontransparent telecom tax starts from the minute a person buys a mobile phone and before they have even uttered the word, “Hello” they are bombarded with the hidden taxes that could be as high as Rs 2,250, not counting the withholding tax. The breakdown of telecom taxes on consumer includes:
- Sales Tax on a new mobile phone which ranges from Rs 300-1500
- SIM issuance tax of Rs 250 which includes activation and SIM supply tax
- Advance Tax of 14%
- Federal Excise Duty/ GST on voice 18.5%-19.5%
- FED/GST on Mobile Data is taxed from 0-19.5%
- Withholding Tax of 14%
The government unsurprisingly is also looking towards imposing an additional tax known as “IMEI tax” which has been on hold for the last two years. Each mobile phone has a unique IMEI number and the government wants the mobile phone users to pay additional tax based on this number. Mind you in the phones where a person can use two to four SIMs at the same time, there are different IMEI numbers, which means double or quadruple the tax for a common man. The telcos looking at the current situation are pleading with the government for tax cuts but since PTA rejected the demands of telecom operators to change the base price of the upcoming 4G spectrum which is $290 million, there’s hardly any hope.
The astonishing wizardry of the Pakistani government is evident from the fact that by just working towards acquiring a mobile phone a person, irrespective of the fact whether he/she legally falls in the tax bracket or not, are introduced to the world of hidden charges. The government has successfully collected Rs. 48 billion from mobile phone users in the name of taxes but the true question is where did it all go? With billions of rupees, over the years the government could’ve built Metro bus projects in various cities of Pakistan as Rs. 29.8 billion was spent on Metro Bus Lahore and Metro Bus Multan was completed at the cost of Rs 28.5 billion.
Also, if the government is collecting billions of rupees every year, then we should have seen hundreds of hospitals and many top class universities across Pakistan but unfortunately no one is talking about where did all the money go. With billions of rupees in revenue from telecom taxes, why do we still need the support and loans from international institutions and banks?
With the 2018’s election at the government’s heels, we often come across with speeches about how a great sum of money was saved in various projects by the brilliance of their strategic decisions. But what we fail to hear is the answer to the question that why is a significant amount of investment in many projects, that are under construction in Pakistan, collected from foreign banks when we have a goldmine (telecom sector) at our hands?
The primary focus of any government across the globe is to facilitate its citizens by providing them with better health services, food, education, security and equal opportunities for excelling in life. In an Islamic state, there are more responsibilities on the shoulder of a government for the welfare of its citizen. However, the present government of Pakistan thinks the other way around, at least all the mobile phone users are apparently goats in front of the lion.