FBR Freezes Bank Accounts of Telenor Due to the Non-Payment of Income Tax

The income tax collection in the country has ramped up in the last couple of years because of new governmental regulations. Any person or entity that voluntary or involuntary tries to evade the tax would face legal consequences. It is evident by the action taken by the Federal Board of Revenue (FBR) against Telenor. The board has frozen the bank accounts of Telenor as the latter was unable to pay the income tax amounting to approximately Rs3.5 billion.

Telenor has to pay this amount to the national exchequer as tax arrears from past years that the company has failed to pay. It has also been learned that Telenor’s appeals have been dismissed by all appellate bodies, as well as the Islamabad High Court, which has ordered the company to pay government dues. However, as of March 28, the company wasn’t ready to pay the liability.

FBR Freezes Bank Accounts of Telenor Due to Non-Payment of Income Tax

Consequently, the recovery operations were started by the enforcement zone of the large taxpayers’ office in Islamabad, which seized Telenor’s bank accounts in all major banks in Pakistan. FBR has also sent letters to a number of other third parties that are holding money or other assets on Telenor’s behalf.

A tax default can be recovered by the Inland Revenue Department from any third party holding money or assets of the defaulter, according to the Income Tax Act. Such third-party recoveries have been started by the large taxpayers’ office, and the FBR will shortly send notices to all Telenor franchises across the country for direct recovery of amounts owed to Telenor.

Furthermore, the FBR’s large taxpayers’ office is taking up the issue of Telenor’s major default with its main office in Norway through its International Taxes Wing, in order to compel Telenor to comply with Pakistan’s domestic tax rules.

Moreover, the sources entail that the FBR is considering suspending and liquidating all of Telenor Pakistan’s financial assets, including mutual funds, treasury bills, investment bonds, sukuk, and TDRs, in order to recover the unpaid tax amount.

In addition to that, notices will be issued to the Excise and Taxation Department to seize all vehicles registered in Telenor’s name, and CDA and Gulberg will be asked to freeze all Telenor immovable properties under the tax law until the company’s default is paid in full to the government exchequer.

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Telenor’s Response:

On the matter, Telenor Pakistan Chief Corporate Affairs Officer Kamal Ahmed said,

As a law-abiding and ethical corporate citizen, Telenor Pakistan takes a very responsible approach in discharging its due tax obligations in a timely manner; and we take immense pride in our position as one of the leading contributors to the national exchequer. We recently received a notice from the Federal Board of Revenue for the recovery of a disputed tax demand adding that we have reservations on these alleged tax demands and have challenged the notice and appealed the order within the hierarchy of Islamabad High Court.

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