14% Advance Tax Imposed on Internet Across Pakistan

Another day and we have a news about another tax. Reports suggest that Government of Pakistan has imposed 14% tax on internet across Pakistan. With this new advance tax — which can be reclaimed at the time of filing of returns — 14% of the bill amount is supposed to get deducted on internet usage across Pakistan.

This is a federal tax, and is imposed for Internet users in all provinces.

For those who are wondering that Punjab just withdrew taxes on internet then why this new tax, then the tax that Punjab Government had impose and later reverted was GST.

GST or General Sales Tax is different from WHT, as GST is collected by provinces (and it is never returned) while WHT is collected by federal government and it can be re-claimed at the timing of filing returns.

Anyone with Rs. 1,000 monthly bill will have to pay Rs. 140 extra as WHT

For commoners, you just have to pay 14% extra on your internet services. Anyone with Rs. 1,000 monthly bill will have to pay Rs. 140 extra now, as advance tax.

For internet users in KPK and Sindh, you will have to pay 14% WHT and another 19.5% as GST. So a total of 33.5% tax for using internet.

ISPs are already in process of informing their customers about this new tax.

Those customers who file their returns can claim 14% WHT back, while non-fillers can forget about this money for ever.

Mobile companies are still not sure if they will deduct this tax for mobile data usage or not. They said that bill requires interpretation and will be clarified at a later time.

A tax expert told ProPakistani that mobile phone companies already deduct 14% advance tax or WHT from card loads, which is then used for telecom services and mobile data as well. If internet is taxed at same rate then there will no change in how taxes are deducted for mobile phone users. Which means that 14% advance tax on internet is applicable for mobile phone users as well.