In a move that has the masses singing praises, the Supreme Court suspended the deduction of taxes imposed on the top-up of prepaid cards. The Honorable Chief Justice of Pakistan Mian Saqib Nisar, proclaimed the deductions as exploitative and illegal, looting the ordinary man. The sentiment is a highly legitimate one where the majority of the population that does not fall under the tax net is being charged exorbitant amount of money in the form of sales and withholding tax that is deducted from the source.

Where the Honorable Chief Justice Saqib Nisar accurately pointed out the discrepancies in the law governing withholding taxes, one which can be subverted to exploit customers, the overarching issue remains that the law itself is the tip of the iceberg. Such an injunction, in all its imperfect glory, is but an accessory to a wholly flawed tax regime. The economic policy of the country is subject to an archaic and nebulous form of taxation regime that needs to be overhauled. Where millions of consumers have been granted financial respite under this tax suspension, the economic processes of the country are entirely entrenched in such decrepit tax policies, inexorably backed by rationalized legislation, condoned by a democratic parliament and enacted through officiating budget bills serving the larger financial machinations of the country.

The decision is set to have a domino effect, costing the national exchequer a revenue loss of Rs123 billion at the federal and provincial level. The proclaimed ‘illegality’ of the imposed tax, without defining the parameters or grounds of illegality other than its injustice, has further implications for all other taxes on commodities which are equally beyond the affordability of the poor. Where such an egalitarian decision is laudable, with our imperfect economic structure, the implications run the risk of economically derailing an already faltering economy.

Where the ruling itself, and the precedent set in taking action against other tax discrepancies on commodities like diesel, speaks to the woes of the poor and takes up the mantle of bringing justice to the masses, the decision loses its veracity in a system that functions through the fulcrum of such discrepancies. At the end of the day such a decision, without substantiation that cell phone operators or the federal government are breaking the law and without a consequential thorough and comprehensive re-writing of the law to curtail future incongruities, the decision runs the risk of only being deemed a populist one.