Internet services in Pakistan have rapidly expanded since past few years and better packages at cheaper rates are now available. Taxation, however, brings a little difference of internet pricing across the country. While a subscriber in Punjab would be charged as per the listed rate, a subscriber in Sindh would be charged higher.
This is because of GST implemented in Sindh through Sindh Revenue Board, applicable on packages above Rs.1,500. Similarly on the billed amount of above Rs. 1,000 a Withholding Tax of 10% is charged. Local service providers bill the amount accordingly in Sindh, particularly to postpaid customers. Some internet packages that are priced at Rs. 1,600 in Punjab are reduced to Rs. 1,500 in Sindh in order to prevent GST from inflating total cost of the package.
It is important to analyze these to see what taxes you are being charged and how much you are actually paying. Following are three postpaid bills we at Smartchoice.pk have picked up from Karachi and extracted details for your knowledge.
We analyzed recent PTCL bill of 2 Mb Unlimited. The DSL charges are Rs.1,549 and after adding other service charges the total amount is Rs. 1,854.
Following are the charges:
Billed Amount = Rs. 1,854
W.H Tax = Rs. 121
Sales Tax = Rs. 361
Arrears = Rs. 4
Total = Rs. 2,340
When we divided Sales Tax amount with Billed Amount, we got tax rate of 19.5%. This shows PTCL charged the right amount for this tax. But we were unable to explain Withholding Tax. The amount of Rs. 121 is lower than what should have been billed on Billed Amount or even on DSL Charges. The 10% tax on Rs. 1,854 results in Rs. 185, the actual billed amount is lower. Even talking to PTCL representative this could not be explained, but good for the consumers if they are charged lower amount.
We analyzed Qubee’s recent bill for 2 Mb Unlimited connection and found it confusing, to say the least.
Billed Amount = Rs. 1,900
W.H Tax = ?
Sales Tax = ?
Total Amount = Rs. 2,390
The bill does not list any taxes and calculations make little sense. From where the ‘previous balance‘ of Rs. 2,780 appear is unexplained and the amount of Rs. 490 is an orphan number added to the Billed Amount which is 26%, much higher than the Sales Tax percentage.
If we calculate sales tax amount from the Billed Amount, it comes out to be Rs. 370 and W.H tax as Rs. 190, total taxes standing at Rs. 560. It is still higher than the unknown amount in the bill, still the lack of details is troubling because a person cannot properly find out how much taxes he has paid in one year. We contacted customer service and have sent an email with questions, their response is awaited.
Recent bill of Worldcall for 4 Mb Unlimited with TV subscription was analyzed for taxation and it also had some unexplained elements.
Billed Amount = Rs. 2,491
W.H Tax = ?
Sales Tax = 438
Total Amount = Rs. 2,949
The DSL charges are Rs. 2,066 and adding Cable and Digital TV takes the amount to Rs. 2,491. There is no Withholding Tax mentioned and the amount of Sales Tax comes out to 17.5% of the Billed Amount. It is lower for unexplained reasons and if applied on internet package alone (Rs. 2,066), the Sales Tax comes out to 21.2%. Service charges of Rs. 20 are also unexplained.
From these three postpaid connections, PTCL has the most details of the taxes subscribers pay while Qubee has the least. Some amounts are unexplained and customer service representatives are at a loss themselves. This is important because many a times customers are over or under charged in the name of taxes and service charges, resulting in confusion of the right amount to be paid.
Similarly any tax calculations for any reason, including proving taxes paid in a year, would become a hassle because of amounts that don’t stack up or not included in the first place. This can also be problematic in any audits or if you want to show taxes paid to apply for Visas abroad (though that’s not necessary).
We will be analyzing bills of other service providers in future.
Are you subscriber of the services mentioned above? Do your taxes add up? Share your views in comments below.
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1854+361=2215 now for with holding tax calculation 2215-1000=1215 now take 10 percent of 1215 which is 1215*10% = 121
[…] Rs. 2,100*19.5% tax applicable on Karachi users […]