In the federal budget for the fiscal year 2022-23, the government planned to increase the Federal Excise Duty (FED) on telecommunication services from 16% to 19.5 percent. The government has increased the tax on each recharge of a mobile balance, and telecom providers have been advising their customers that a 19.5% withholding tax would be charged on each recharge of a mobile balance.
When presenting the federal budget on Friday, Finance Minister Miftah Ismail stated that the government has chosen to raise FED on cellular services.
The previous administration decreased the federal excise duty on telecom services from 17 percent to 16 percent last year in order to help enterprises and the general public. The FED on telecom services has been raised for FY23, which is likely to put pressure on companies and, most importantly, end-users.
When contacted, a PTA official stated that the PTA is watchful about the rates and tariffs imposed by Cellular Mobile Operators (CMOs), and that any alleged incidence of charging beyond the declared tariffs and related taxes would be investigated in line with the law.
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