At present, people breathe in an atmosphere of mobile phones and other telecom devices, but by subjecting these essential items and services to heavy taxes in the mini-budget the government has reduced the breathing space for them. This has come together with the hike in medicine prices as a result of the new taxation measures.
In the mini-budget, the government has envisaged to raise a total of Rs350 billion through the new taxes. And the telecom sector accounts for around one-tenth of these revenue receipts. About 98% of the 147 million mobile phone users in Pakistan use less expensive hand-held prepaid devices and since most of the taxes on these varieties are deducted at the recharge stage, the huge majority of consumers are bearing the brunt of the ever-new taxes. The low-income groups are prepaid consumers, so they are not entitled to adjustment of advance tax or any other taxes. Only tax filers can enjoy the adjustment facility. Obviously, the 2% consumers in the upper-income bracket have been granted this facility. The affluent consumers have been provided with sufficient elbow room.
So like all taxes, the major burden of the fresh taxes has been placed on people with limited income. The authorities should be knowing that this group of people is already paying a plethora of taxes, yet they have added to their load. The authorities must be in the knowledge of the taxable capacity of the lower segments of the population, still they are stretching their capacity to pay more and more taxes. Faced with the double burden of the increasing taxes and runaway prices of essential commodities, now the masses have been forced to continually cut down on the consumption of nearly all things that are not natural. As for the fresh taxes on mobile phones and other telecom services, it is very difficult to understand the structure of the fresh taxes, particularly on mobile phones. The calculations are so complicated that most probably even the taxation authorities don’t know them, let alone a vast majority of the consumers.
Published in The Express Tribune, January 20th, 2022.