Taxonomy of Section 236

This highly illogical section has not considered the practical stages of the transaction and was collecting advance income tax even from the above referred negative list at the stage of purchase of pre-paid calling cards. From the above referred facts, it can be effectively concluded that PTCL doesn’t have any effective mechanism to incorporate advance tax, Collected along with pre-paid calling Cards, into the monthly bills.


The Pakistani truth has now become the Universal truth, after induction of Maxwell stamp, that CBR is operating a single entry system based on a given specified forms. This procedure helps the root level machinery to collect Advance tax from the taxpayers on the last days of a tax year by way of hook and crook for meeting the targets. The excess was refunded to the taxpayers during the very first week of next tax year.

In case of advance income tax, CBR is not even bothered by the claimants’ legal right of adjusting the advance tax against final tax liability. The core reason was that CBR is certain about the fact that the revenue authority is still gaining at the cost of not increasing the revenue base and by not catering potential taxpayers due to the lack of education. This situation has made the advance Income tax a sort of “Bhatta” which was neither refunded nor the person was asked to file the tax return and Section 236 was no exception.

It is evident from the above referred scenario that CBR itself is eating the advance tax to meet the revenue targets. The tax collected from the community through pre-paid calling cards used through PTCL phones were neither recorded by the CBR nor incorporated into the telephone bills of the subscribers. This results in double claim of Advance Income Tax and even thrice in the case of induction of whole seller.

The other core reason for not properly accounting for the tax revenue is that the claimant claims the advance tax in Subsequent tax year. Hence, the subsequent tax years’ revenue was curtailed and considered for meeting the targets.


As far as section 236 is concerned, CBR has only two options, ask the PTCL to device a mechanism for incorporation of amount of telephone Card, as an expense [already paid] in respective columns heading appearing telephone bills and advance W.H.Tax in its respective column. Moving with current Scenario will not only continually deprive the Government of Pakistan from the revenue but would cost unnecessary refunds. Government should note that such taxes represent the behavior of the revenue authority and catch the innocent taxpayers in blank.

In furtherance, Central Board of Revenue should move towards double entry system for recognition of liabilities owed to the taxpayers and society at large by the government. This will also help the government to segregate the tax collected with real efforts of Central Board of Revenue personnel and revenue automatically collected through WHT & PTR mechanism for performance measurement and effective near to actual budgetary preparation purposes.

The author Mohammed Ashraf, ACCA, APA, AFA, CAT is an international tax advisor. He can be contacted at [email protected].

Note: The views presented above are of the author and Accountancy may or may not agree with his views.

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