The Pakistan Tehreek-e-Insaf (PTI) government has proposed a 10% to 15% advance tax on telecom services in the mini-budget it presented in the National Assembly on Thursday.

The mini-budget abolishes tax exemptions of Rs343 billion. Consequently, around 150 items will be taxed.

Mobile phone consumers already pay heavy pay taxes on telecommunication services. For prepaid users, most of the taxes are deducted when they recharge the prepaid cards. After the approval of the mini-budget, they will be paying Rs3.9 more on every Rs100 recharge.

At present consumers get an available balance of Rs76.10 on an Rs100 recharge after tax deductions. The available balance will be reduced to Rs72.20 after the increase in the advance tax rate.

The government, at present, collects 10% or Rs9.10 in advance tax on every Rs100 prepaid card. From the remaining Rs87, Rs14.80 or 19.5% are deducted as General Sales Tax (GST).

An increase in the advance tax rate will result in a deduction of Rs13 instead of Rs9.10. However, the GST will stay at Rs14.80.

Hence, they will be paying Rs27.8 on every Rs100 recharge.