You may be probably aware of the recent presidential regulations; following the ordinances the withholding tax was raised by 1.5 %, to be pertinent/deductible on the entire services as well as Telecom.

Based on this regulation, all prepaid cards and postpaid bills will be charged 11.5 % as withholding taxes (charges subtracted on balance top-ups). As demonstrated below:

• Deduction on Card Load= 11.5 % Withholding Tax + 5% Services Charges = Rs.16.5

Following the above raise in withholding tax, total taxes on telecom services have hit 31 %. The following detail categorizes the tax applicable on telecom services:

• Withholding Tax: 11.5 Percent
• Federal Excide Duty: 19.5 Percent

Sum of all Taxes: 31 percent is the sum of all taxes applicable

What worse can happen moreover all cellular companies are charging 5 percent of the credit as service charges. Following these charges, the sum of money deducted from cellular services is as follows:

• Sum of all Taxes: 31 % as demonstrated above
• Telecom Service charges: 5 Percent (prepaid only)
• Total deduction: 31 + 5 = 36 % is the outcome as total deduction

For example, if you reload your account with a top-up of Rs.100, the charges applicable will be Rs.36, as a result only Rs.64 will be left in your prepaid account.