Real impacts of mini-budget -mobile top up become 5% expensive after the tax increase

 Withholding tax increased from 10% to 15% on mobile recharge

The mobile phone service providers have increased the advance tax known as withholding tax on the recharge of balance. The advance tax rate on prepaid mobile phone recharge has been increased by 5%.

 Advance tax increased from 10% to 15%. This increase has been made just few days after the approval of supplementary finance bill or popularly known as mini-budget. The cellular service providers informed the users that advance tax on prepaid cards has been increased from existing 10% to 15%.

After the increase, a total of Rs27.80 will be deducted on a recharge of Rs100 and they will get a net balance of Rs72.20 instead of Rs76.10 after the imposition of additional taxes.

The increase in the advance tax rate will result in a deduction of Rs13 instead of Rs9.10 while general sales tax (GST) will remain at Rs14.80 on mobile top-up.

Consumers were already paying heavy taxes on telecommunication services but the mini-budget will put extra burden on the masses.

The prices of medicines have also been increased due to the mini-budget of worth Rs360 billion, which was passed by the National Assembly last week with a majority vote in line with the conditions of the International Monetary Fund (IMF).

The IMF had set five prior conditions for the revival of the $6 billion stalled programme, including the passage of the mini-budget and giving absolute autonomy to the central bank with the federal government keeping no check on its functioning.

The government also succumbed to pressure exerted by local car assemblers and increased the sales tax rate to 12.5% on the import of electric vehicles — even higher than the initial 5% rate it had proposed while introducing the “mini-budget”.

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