- Withholding tax on mobile recharges increased from 10% to 15%.
- Telecom companies inform users of reduced net balance after recharge.
- Government aims to generate approximately Rs 43 billion annually from the increased tax.
ISLAMABAD: The Pakistani government has increased the withholding tax on mobile balance recharges, raising it from 10% to 15%. Telecom companies have been notifying users about the updated charges through text messages, indicating that a recharge of Rs 100 will now yield a balance of Rs 86.95 due to the new tax rate.
Sources reveal that the increase in withholding tax will bring in approximately Rs 43 billion in annual revenue for the government. This additional tax means that on a Rs 100 recharge, Rs 13.04 will be deducted as withholding tax, leaving the consumer with Rs 86.95. Furthermore, when accounting for the General Sales Tax (GST) at 19.5%, which amounts to Rs 14.19, the effective balance available for usage drops to Rs 72.76.
The Cellular Mobile Operators (CMOs) are applying both the withholding tax and GST on pre-paid recharges. GST is also applied on each call, SMS, and data usage, further affecting the available balance for consumers. The Pakistan Telecommunication Authority (PTA) has set a cap on call setup charges at Rs 0.15 per call and remains vigilant about the rates and tariffs charged by CMOs. PTA officials have stated that any reported instances of overcharging above the published tariffs and applicable taxes will be addressed in accordance with the law.
This move has sparked a conversation among mobile users in Pakistan, as the increased tax significantly impacts their mobile usage costs, drawing attention to the government’s efforts to boost revenue through such measures.
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