Written by Hamza Shahnawaz in IT & Telecom, Taxation Subtitle: Mobile, internet and prepaid services remain subject to 15% withholding tax, while specified non-filers face a 75% rate under Section 114B. ISLAMABAD: The Federal Board of Revenue (FBR) has notified the withholding tax rates applicable to telephone, mobile phone and internet usage for Tax Year (TY) 2027, which commenced on July 1, 2026, under the updated Income Tax Ordinance, 2001. The revised rates have been incorporated into the Income Tax Ordinance, 2001, updated through June 30, 2026, following amendments introduced by the Finance Act, 2026. The tax collection mechanism is governed by Section 236 of the Ordinance. Withholding tax on telephone bills Under the updated law, withholding tax will be collected from telephone subscribers, other than mobile phone subscribers, where the monthly bill exceeds Rs1,000. The applicable rate is: • Telephone subscribers (excluding mobile phone subscribers): 10% of the amount exceeding Rs1,000 in the monthly bill. Tax on mobile phone and internet services The FBR has retained a 15% withholding tax on payments made by subscribers of the following services: • Mobile telephone services • Internet services • Prepaid internet cards • Prepaid telephone cards • Sale of mobile or internet units through any electronic medium or any other form The applicable withholding tax rates are: Category Withholding tax rate Mobile phone subscribers 15% Internet subscribers…