Recently our internet sector hit another tax. Yes the government has levied 14% advance tax on the internet which can be reclaimed at the time of filing of returns. According to the sources, 14% of the bill amount is supposed to get deducted on internet usage across Pakistan. This is a federal tax applicable for every province.

Government levies 14% advance tax on internet nationwide

This interestingly vicious, with Punjab lifting taxes and federal government imposing it again up to 14%, where the consumer and future of ISPs and telecom is at stake. The previous one was GST which is collected by provinces the currently imposed WHT is federal tax and can be re-claimed at the timing of filing returns.

For commoners, this is 14% extra amount on your internet services but anyone with PKR. 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.

Those customers who file their returns can claim 14% WHT back, while those who are non-filer will never get it back. 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.

However, an expert clarified a bit by saying that they already deduct 14% advance tax and WHT on card loads which is then used for providing enhanced telecom services. Which means that 14% advance tax on internet is applicable for mobile phone users as well. But the charges will not be deducted if government levies the tax at the same rate.