The Ministry of Finance and Revenue has revealed that telephone service providers across Pakistan collected a total of PKR 84.249 billion in income tax under Section 236 of the Income Tax Ordinance, 2001, between July 2024 and March 2025.
Official documents confirm that the entire amount was deposited into the national exchequer in accordance with Rule 43 of the Income Tax Rules, 2002, which mandates weekly submission of collected taxes. Authorities reported no material discrepancies between collected and deposited amounts, highlighting enhanced transparency and procedural compliance.
Boosting Compliance Through Digital Integration
Section 236 requires advance income tax collection on phone and internet usage. With over 196 million subscribers, telecom operators serve as key contributors to indirect tax revenue. Although the collection process has been stable over the years, lack of access to subscriber-level data previously hindered accurate reporting.
To tackle this, the Federal Board of Revenue (FBR), via PRAL, initiated a digital data exchange program with Cellular Mobile Operators. This system enables the secure monthly and quarterly transfer of subscriber-specific tax data through a File Transfer Protocol (FTP) system, significantly improving the accuracy of withholding statements and ensuring real-time monitoring.
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Monitoring and Enforcement
The Large Taxpayer Office (LTO) in Islamabad oversees weekly data submissions and reconciliation between declared and deposited revenues. Any discrepancies, such as under-withholding or delays, are addressed through recovery actions under Section 161 of the Income Tax Ordinance, 2001.
With the telecom sector’s growing role in Pakistan’s digital economy, its tax contributions are increasingly crucial. The collection of PKR 84.2 billion in just nine months underscores the sector’s vital role in national revenue generation.
Experts believe that deeper digitization, strong policy enforcement, and collaboration between telecom firms and regulators can further enhance revenue, efficiency, and fairness in the tax system.
