ISLAMABAD -  Pakistan Telecommunication Authority will write to Federal Board of Revenue to stop deducting taxes from those, especially the poor, who do not fall under taxable category. Around Rs35 is deducted on mobile upload of Rs100 in terms of withholding tax and other taxes.

Last week, a Senate sub-committee directed the PTA to stop taxing consumers who do not fall in the taxable category on purchase of mobile cards.

“Taxes decisions are implemented by Ministry of Finance (Federal Board of Revenue) and we can only request them to make changes in tax regime for mobile card loads,” PTA official said.

It is not the first time that flaws in taxing of pre-paid mobile phone recharges has been pointed out. Many believe charging withholding taxes from everyone including poor is the major hindrance in growth of telecom industry in the country. Three years back, government increased the withholding tax from 10 percent to 15 percent.

Mobile phone companies deduct withholding tax automatically on every payment made against telecom services. Later, this money is deposited in national treasury.

During last many meetings of parliamentary standing committees, officials admitted that government has no mechanism to check whether phone companies actually deposit the whole money in national kitty, which they collect under different taxes or not.