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Taxation
Chief Justice Asif Saeed Khan Khosa on Monday remarked that service tax on mobile phone pre-paid cards and recharges needs to be determined as a huge sum of money is deducted from the pocket of masses due to the law. A three-judge bench headed by Chief Justice Asif Saeed Khan Khosa was hearing the issue of suspension of high tax/other charges by mobile phone companies on cell phone recharge.

On behalf of the federal government, the additional attorney general submitted a report about taxes charged by cellular service providers as well as the details of all mobile phone taxes being collected over the past one year.

During the proceedings, Chief Justice Khosa asked the additional attorney general what he would like to say about Article 184(3) of the Constitution, to which he said that ‘deduction of tax of mobile recharge does not fall in the category of people’s interest, but the Supreme Court has stopped service tax on mobile phone pre-paid credit.

The federal and provincial governments have been arguing that oversight over mobile phone taxes does not fall under the Supreme Court’s powers as defined in Article 184(3) of the Constitution.
The Article 184(3) of the Constitution states: “[…] the Supreme Court […] if it considers that a question of public importance with reference to the enforcement of any of the fundamental rights conferred by Chapter I of Part II is involved, has the power to make an order of the nature mentioned.”This prompted the top judge to say that it needs to be determined whether there is a fault with the law or there is any problem with its implementation by the government to generate revenue.

“Money is being deducted from the pocket of the masses due to wrong implementation of the law and the other issue is: can the government deduct tax in advance?” he observed.

Another member of the bench Justice Ijaz-ul-Ahsan questioned how a citizen can be forced to pay tax if he does not fall in that category, saying there should be some mechanism for the people who do not fall in the tax net.

The attorney general for Pakistan said that a consumer has to pay advance tax on mobile cards, adding if somebody does not fall under tax net, he can claim a tax refund.

This angered Justice Ahsan who asked the attorney general if a fruit vendor should approach the tax commissioner seeking refund. He said, “The state should be sincere with his people, and to say people who claim tax refund will be facilitated and those who don’t, is not that a state should opt for.”

The Chief Justice said that the government should find a solution to the issue instead of assuming that every citizen can afford to pay tax.
The hearing of the case was adjourned till Wednesday (tomorrow).

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Taxation
Investors and companies withdrew huge sums of cash from their money market accounts to make their annual tax payments ahead of the April 15th deadline, according to a private report released on Wednesday. Domestic money market fund assets tumbled by $53.19 billion, which was their biggest weekly decline in about 10 months to $3.016 trillion in the week ended April 16, the Money Fund Report said.

“The decline was driven primarily by personal and corporate tax deadlines,” it said in a statement. Total money fund assets were below a nine-year high of $3.071 trillion set in March. Taxable money market fund assets decreased by $48.01 billion to $2.883 trillion, while tax-free assets fell by $5.18 billion to $133.84 billion, according to the report, published by iMoneyNet.

The average seven-day simple yield on taxable money-market funds was unchanged at 2.06%. The weighted average maturities (WAM) of taxable money funds increased by one day to 31 days, iMoneyNet said. The average seven-day simple yield on tax-free and municipal money funds climbed to 1.16% from 1.09% the week before. The WAM on tax-free funds was unchanged at 25 days.
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Taxation
Federal Board of Revenue (FBR) and National Database & Registration Authority (NADRA) Monday agreed to carry out a ‘360-degree’ analysis of the non-filers for bringing them into the tax net.

Sources told Business Recorder here on Monday that the senior NADRA officials Monday visited FBR House to hold a meeting with FBR Chairman Mohammad Jehanzeb Khan and his team of members including FBR Member Inland Revenue Policy and FBR Member Inland Revenue Operations.

Both the sides discussed in detail the measures to broaden the tax base by sharing taxpayer’s data available with the NADRA. It has been agreed to start the exercise of searching for new taxpayers with the help of NADRA database.

According to the sources, the actionable data of NADRA would be used to carry out a ‘360-degree’ analysis of the non-filers for bringing them into the tax net. The FBR is in the process of acquiring data of up to 400,000 non-filers from NADRA for taking necessary action against them. Now, the FBR has already acquired overwhelming data which would be used for broadening the tax base. A 360-degree view would be taken of non-filers including their lifestyle, expenditures, foreign travels, purchase of properties and other data. By the end of this month, the FBR will roll out this exercise.
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