ISLAMABAD: The advance tax rate on prepaid mobile phone recharges has been hiked by 5% following the ratification of the Supplementary Finance Bill, often known as the mini-budget.
Users were advised by cellular service providers that the advance tax on prepaid cards had been increased from 10% to 15%.
Following the rise, a total of Rs27.80 would be taken from a Rs100 recharge, leaving a net balance of Rs72.20 instead of Rs76.10 once the higher taxes are applied.
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”.
It also waived off 15% income tax in favour of a couple of wealthy families of the country.