The Tax on Your Mobile and Internet Bill in Pakistan

Advance income tax is collected on your phone bill, your internet bill, every prepaid card you buy and every top-up you make through an app.

It is charged whether you earn enough to pay income tax or not, and whether you have ever filed a return or not. Most people have never looked for it on the bill.

We read section 236 of the Income Tax Ordinance, 2001 on 2 September 2026, in the consolidated text FBR publishes on its own download site.

Everything the section covers

There are five separate points of collection, and between them they cover almost every way a person in Pakistan pays for connectivity.

That last line is the one worth noticing. Selling units "through any electronic medium or whatever form" covers topping up from a banking app, a wallet, a retailer's terminal or the operator's own app. There is no version of buying credit that sits outside the section.

When it is taken

The timing differs between postpaid and prepaid, and that is why prepaid users rarely see it.

For a bill, the person preparing it charges the advance tax in the manner telephone or internet charges are charged. It appears as a line on the invoice.

For prepaid, the seller collects the tax at the time of issuance or sale of the card, and the same applies to units sold electronically. There is no invoice to read afterwards. You simply receive less balance than the number on the card, which is why people describe it as the card "not giving full balance".

What to do about it

Being taxed on a Rs 100 top-up feels unanswerable, and for most people the practical response is small but real.

1. Look at your postpaid bill and find the income tax line.
2. Note the amount, because it repeats every month.
3. Keep your bills if you file a return.
4. Ask your operator for a tax deduction certificate for the year.
5. Give it to your tax adviser with your other withholding certificates.

Whether the amount can be claimed depends on the rules that apply to your situation, and we are not going to state that either way here, because it turns on provisions we have not set out. Ask a tax adviser rather than assume, and ask specifically about tax collected under section 236.

What is not in doubt is that you cannot claim anything without the certificate. Operators issue them on request, and requesting one costs nothing.

Why the amount surprises people

Income tax under section 236 is not the only thing added to a mobile bill. Provincial sales tax on services applies as well, and the two are separate charges levied by different governments.

So a top-up loses value to more than one thing at once, which is why the balance you receive can look sharply lower than the amount paid. Our report on mobile taxes in Pakistan covers the wider picture.

Separately, balance can drain after a top-up because of subscription services rather than tax. That is a different problem with a different fix, and our guide to balance save codes for every network covers the codes that stop it.

If your balance goes missing entirely

Tax explains a predictable shortfall. It does not explain balance disappearing days later, or a recharge that never arrived.

For those, the operator is the first stop and the regulator is the second. Our guide to complaining about your mobile network to PTA sets out that route, and PTA has recently directed operators on balance validity, which we covered in our report on the 180 day rule.

The rate is not in the section

Section 236 points to Division V of Part IV of the First Schedule for the rate, which changes with each Finance Act.

We are not quoting a percentage. The consolidated Ordinance FBR publishes is amended up to 20 February 2026, before the Finance Act, 2026 took effect on 1 July 2026, so the table in the copy we can read is not current. Your own bill is the authority for what you are being charged today.

Common questions

Is there tax on mobile top-ups in Pakistan?

Advance income tax is collected on prepaid cards and on the sale of units through any electronic medium, under section 236.

Does it apply to internet bills too?

Yes. Internet bills and prepaid cards for internet were both brought into the section.

Why do I get less balance than I paid for?

Tax is collected at the time of sale, and provincial sales tax on services applies separately. Subscriptions can also drain balance afterwards.

Can I claim this tax back?

Ask a tax adviser about tax collected under section 236 in your situation, and get a deduction certificate from your operator either way.

Does it apply if I do not file returns?

The section provides for collection at the point of sale or billing regardless.

What is the rate?

We do not quote one. It sits in the First Schedule and the published Ordinance predates the Finance Act, 2026.

Last checked and sources

Last checked 2 September 2026. We downloaded the consolidated Income Tax Ordinance, 2001 from FBR's own download site, the version amended up to 20 February 2026, and read section 236 in it. The collection of advance tax at rates specified in Division V of Part IV of the First Schedule on the telephone bill of a subscriber, prepaid cards for telephones, the sale of units through any electronic medium or whatever form, the internet bill of a subscriber and prepaid cards for internet, the requirement that the person preparing the telephone or internet bill charges the tax in the manner those charges are charged, and the requirement that the person issuing or selling prepaid cards or units collects the tax at the time of issuance or sale, are all taken from that text. The rate is not quoted here because it sits in the First Schedule and the published consolidated text predates the Finance Act, 2026. We have deliberately not stated whether this particular collection is adjustable against your annual liability, because that turns on provisions we did not read, and we would rather say so than guess. Provincial sales tax on services is a separate charge applied by provincial governments. Nothing here is tax advice.