The tax on mobile calls longer than five minutes may well be about to run into technical difficulties. One of the main problems is expected consumer behaviour. The tax is on calls lasting more than five minutes: very well, terminate the call just before the five-minute mark, and call again. That way, the tax collector will only get to levy his tax when the phone call is so scintillating that either caller or called carry on past the taxable limit. However, the mobile companies like this even less than the Federal Board of Revenue (FBR), for it might well lead to the jamming of their system, and thus trouble with the Pakistan Telecommunication Authority for poor service. Apart from that, the new tax makes nonsense of the carefully constructed packages which have made mobile phones so popular.
The FBR, with this tax, seems to be trying to elbow in on the mobile phenomenon, which has very speedily become an essential for all, rich and poor alike. By going along with this, the government seems to have given up on its twin planks of widening the tax net and FBR reform. Mobile phones became affordable because of tariff packages that are now likely to go out of the window. Because they are now an essential, people will hang on, even if their budgets become untenable. It was no rocket science to understand that this was a regressive tax, likely to impact most the consumers already badly hit by the inflation the government is unable to control (and one of whose ministers doesn’t even believe it exists).
Instead of falling into such a defeatist mentality, the government should realise there are still two and a years left in its tenure, which is plenty of time to raise tax revenue by the solid means of bringing more people into the tax net, which would entail reforms in the FBR. The ‘Musical Chairs’ attitude at the FBR Chairmanship (of which the present incumbent is the fifth appointed by this government) and the Finance Ministry (where the fourth recently began his tenure) must end, so that there can be some consistency in policy.
