SC suspends tax on mobile cards

LAHORE: Chief Justice of Pakistan (CJP) Saqib Nisar on Monday suspended the ‘exorbitant tax deductions from mobile phones pre-paid calling cards and easy load by companies and Federal Board of Revenue (FBR), as the apex court gave a two-day deadline to follow the orders pertaining to the suspension.

A three-judge bench comprising Chief Justice Nisar, Justice Ijazul Ahsan and Justice Umar Ata Bandial was hearing a suo motu case at the Supreme Court Lahore Registry.

During the hearing, FBR Chairman Tariq Pasha and lawyers of cellular companies present in the court were unable to answer a query repeatedly asked by the judges that under what law a person not liable to pay tax could be forced to pay tax.

The FBR chairman said, “At least 130 million people use the mobile phones while the tax deduction is the personal act of the companies. Only 5 per cent people in the country pay the taxes.”

He admitted that there was no mechanism to distinguish between the people liable and not liable to pay tax.

“If you have no such mechanism then your policy to collect tax is sheer discriminatory in nature and the court has power to set aside the same,” Chief Justice Nisar told the FBR head.

The court remarked, “The public is being looted. How can tax be received from a street vendor? Deduct tax from the person whose mobile phone usage is more than set limits.”

“Rs 38.08 are deducted on a prepaid mobile card of Rs 100,” Chief Justice Nisar remarked. “This is illegal.”

“How can tax be received from a person who does not come in the tax net? It is illegal to provide Rs 64.38 to a person who charges Rs 100 card in his phone. A comprehensive policy should be made over the tax deduction,” directed the court.

“Not distinguishing between a tax payer and defaulter is discrimination. As per constitution, this discriminatory policy can be annulled,” said the chief justice.

Justice Ijaz said a policy on levying tax ought to be formulated. “How can a hawker be brought into the tax net?” he said.

The chief justice also criticised subsidised night call packages offered by the cellular companies to attract the youth. “These call packages have badly damaged the culture of our country,” he observed.

Justice Bandial also noted that the FBR had been outsourced half of its functioning as it had been collecting tax through private companies.