Only taxpayer should pay tax on mobile phones: SC

ISLAMABAD: The Supreme Court (SC) on Wednesday observed that cellular services’ taxes should be paid by the taxpayers, who are eligible to pay them.

SC Judge Justice Ijazul Ahsen questioned as to how tax could be collected from a driver, a vendor, a plumber and a barber who does not come under the tax net. The apex court directed the federal and provincial governments to submit comprehensive details regarding the taxes they have collected on mobile phones over the past one year.

A two-member bench of the apex court, headed by Justice Qazi Faiz Isa, heard a case regarding taxes charged by cellular phone companies. During the course of proceedings, the court asked the law officer as to whether the instant matter falls under Article 184(3) of the Constitution.

Attorney General for Pakistan Anwar Mansoor replied that the matter did not fall under the categories of fundamental rights or public interest and therefore the apex court should not have intervened.

The Article 184(3) of the Constitution states: "[...] the Supreme Court [...] if it considers that a question of public importance with reference to the enforcement of any of the Fundamental Rights conferred by Chapter I of Part II is involved, has the power to make an order of the nature mentioned."

Appearing on notice, the law officer, representing the Punjab government informed the court that in lieu of the suspension of cellular phone taxes, the provincial government could not collect revenue of Rs80 billion.

The court directed the federal government to explain the laws under which mobile service taxes are collected from people who do not fall under the tax net. Justice Qazi Faiz Isa asked as to how the tax collection could be suspended without the suspension of the concerned laws.

Justice Ijazul Ahsen, another member of the bench, asked how the government will determine who is to pay taxes and who not. During the hearing, counsel representing a cellular company told the court that complying with the court’s order, mobile companies had removed a 10 percent service charge on mobile phones.

Meanwhile, Justice Qazi Faiz Isa said as the verdict to suspend mobile phone taxes had been given by a three-member bench hence, it would be appropriate that a three-member bench hear the case. Justice Isa then referred the matter to Chief Justice of Pakistan for his consideration. Last year in June, the Supreme Court suspended all taxes deducted by cellular companies on mobile phone recharge.