Cellular operators to pay 10pc WHT in advance
The government and cellular operators have reached a consensus on advance payment of withholding tax, as it was decided that the cellular operators will make 10 percent advance payment of withholding tax on account of 3G and 4G spectrum auctions within the ongoing month.
However, the FBR has been assigned to devise a formula for repayment of stuck up billions of rupees refunds of the telecom operators in different phases.
FBR Chairman Tariq Bajwa said:
[pull_quote_center]Yes, we are devising a formula to repay refunds to the telecom operators and the details will be shared after finalizing it. The FBR is striving hard to achieve twice revised tax collection target of Rs2,275 billion till June 30[/pull_quote_center]
On every auction done by the government, the Income Tax Ordinance authorizes the FBR to collect 10 percent WHT from the withholding agent who is selling any asset of the government. One of the companies had also raised the issue that the FBR had not yet provided them stuck up refunds so they would be unable to submit billions of rupees withholding tax in advance.
The WHT is an adjustable tax and when the companies file their returns in the next fiscal year then it could be adjusted, keeping in view their overall tax liabilities.
The FBR had so far collected Rs1,745 billion in the first 10 months (July-April) of the current fiscal year and it will have to collect Rs530 billion in order to achieve the revised tax collection target of Rs2,275 billion.
Finance Minister Ishaq Dar said:
[pull_quote_center]We are satisfied that the auction process was completed in a transparent manner duly recognized globally and the country is now moving forward for the development of the necessary infrastructure, which will result in creation of 900,000 employment opportunities in the next few years.[/pull_quote_center]
Dar said that it is mandatory that the telecos have to pay 10 percent advance tax under Section 236A of the Income Tax Ordinance 2001 on the auction sale price of the spectrum. The telecom companies expressed their agreement to follow the law and make payments due under the law.
He expressed the hope that the telecos will work for the telecommunication development in the country and emphasised on developing areas such as e-health, e-commerce and e-education and other fields. The CEOs expressed their appreciation for transparency and fairness during the whole process and said that it will contribute technological resources to Pakistan’s socioeconomic sectors.
We want to facilitate international investors and provide them an environment, which is conducive to the economic activity in the country.
They said that the spectrum auction will further add to the renewed confidence of the international investors in Pakistan’s economic policies.
They resolved to introduce the new technology, local-based telecom industry and to provide maximum benefits to the consumers as a result of the spectrum auction