Govt to Propose a New Solution for Taxes on Mobile Phone Cards

The government has decided to present an alternative formula before the Supreme Court to resume the taxes on mobile phone cards.

The decision seeks to bridge the revenue gap and meet the budgetary target without levying any new taxes in the next five months. The government wants to achieve the revenue target before going to the International Monetary Fund (IMF) for a bailout package.

“No new taxes will be imposed in the current fiscal year to achieve revenue target as prior conditions for availing the IMF bailout package,” says State Minister for Revenue Hammad Azhar.

The state minister announced this while addressing a news conference. He rejected the opposition’s claims of poor performance of economic indicators.
Azhar said that talks with the IMF are underway. He further said that there has been some improvement regarding the conditionalities. “We will not accept any conditionality attached with the IMF that will directly impact our economy or people,” he said.

The state minister also said that the government is not considering any additional revenue measures. Rather, it will present a new formula to revise taxes on the telecom services. He further told that the court has rejected the earlier formula presented by the Federal Board of Revenue (FBR).

“Now we are hopeful that the court will consider our formula,” said Azhar.

It is pertinent to mention here that the apex court had suspended the taxes on the prepaid mobile phone cards in June 2018. It took a toll on the annual revenue collection, as these taxes contributed Rs. 80 billion to the revenue alone.

The government needs to ramp up its revenue collection to be able to acquire a bailout package from the IMF. It entered into talks with the fund soon after it took the charge of the country. However, the scale of adjustments required by the fund was too large.

Talks are underway in which the government is trying to soften up the demands. It is increasing its revenue collection to meet the bar set by the monetary fund.