Cellphone operators minting millions in tax-free Malakand

[postlink]http://chitral-tube.blogspot.com/2010/01/cellphone-operators-minting-millions-in.html[/postlink]PESHAWAR: All cellular companies have been charging taxes on their services in the tax-free zone of Malakand Division, minting millions of rupees each month with the tacit approval of the government officials.

Instead of putting an end to the alleged practice, the relevant department said it would encourage collecting of taxes in Malakand.The companies also charge taxes in the Federally Administered Tribal Area (Fata), another area exempted of taxes. The mobile companies deduct more than 15 per cent tax on reloads, besides on calls and Short Messaging Services (SMS), fleecing the people of the tax-free zones in connivance with the concerned government departments. “We receive a balance of Rs85 after a reload of Rs100,” Tariq, resident of Mingora, said. Post-paid customers are also taxed.


“We believe that every person should pay taxes and in line with that policy, the Federal Bureau of Revenue (FBR) will encourage all government departments and private businesses to charge taxes on their services. In fact, we have informed all stakeholders in writing to ensure deduction of taxes in areas such as Malakand,” said Muhammad Imtiaz, Secretary Withholding in FBR, Islamabad.

The former states of Dir, Swat and Chitral, constituting today’s Malakand Division, has been a tax-free zone since their incorporation in Pakistan back in 1969. The government remained adhered to the status of Malakand Division with respect to levying taxes for several decades and the region was exempted from all taxes.