Tax on Telephone and Internet Users in Pakistan for TY 2025

The Federal Board of Revenue (FBR) has reiterated its policy of collecting advance income tax from telephone and internet users under Section 236 of the Income Tax Ordinance, 2001.

The FBR stated that the tax rates outlined in the Income Tax General Order (ITGO) apply to individuals not listed on the Active Taxpayers List (ATL). These measures aim to enhance compliance and discourage tax evasion, particularly from non-compliant individuals who face significantly higher rates.

Section 236 mandates the collection of advance income tax on several telecommunication and internet-related transactions, including:

• Telephone bills: Applicable to subscribers.

• Prepaid cards: For telecommunication and internet services.

• Electronic transactions: Sale of units via any electronic medium.

• Internet bills: For individual subscribers.

The process for tax collection varies by transaction type. Service providers issuing telephone or internet bills are responsible for including the advance tax in the billing process. Similarly, sellers of prepaid cards and electronic units must collect this tax at the point of sale.

Exemptions

The following entities and individuals are exempt from this tax:

1. Government bodies.

2. Foreign diplomats or diplomatic missions.

3. Tax-exempt individuals who provide a certificate from the Commissioner.

Advance Tax Rates