FBR Ready to Conduct Forensic Audit of Cellular Companies

The Federal Board of Revenue (FBR) made it clear on Thursday before a parliamentary panel, that it is ready to start the forensic audit of cellular companies after provinces articulated objections over tax deduction and collection by these companies. While briefing the Senate standing committee on information technology and telecommunication, an FBR representative said that, Pakistan Telecommunication Authority (PTA) and FBR have no proper way to test the precision of tax deduction and collection from cellular companies.

He also said that the Board has already decided to carry out forensic audit of these companies for which services of foreign consultants are needed as no local expertise is present for such forensic audit. The terms of reference for employing experts have been settled in consultation with provincial authorities and required changes in tax laws have been made sanctioning the FBR for subcontracting the audit.

PTA also informed the LTU team in a recent meeting, that no method or field audit of the cellular companies has so far been carried out by the authority and totally dependent on revenues declared by the cellular companies in their annual financial statements. Member Finance PTA said the authority is cooperating with the FBR and the cellular companies in solving the issue. Anusha Rehman, state minister for information technology said the matter needs to be stimulated and awareness among public be made that they may file tax return. Tax deduction and collection should be made clearer to the public as well as to the government, she also added.

FBR Ready to Conduct Forensic Audit of Cellular Companies

Senator Rehman Malik elevated the issue of $40 million notice to PTA over faults in 3G spectrum. Chairman PTA Ismail Shah said that spectrum issue with Zong would be solved soon as three different options are under consideration. The authority has also started an operation against illegal cordless phones (Dect 6.0) which, are causing intrusion in their spectrum, he added.

“The people have been warned against using illegal devices.”

He added.

However, he made it clear that spectrum was made available by the Frequency Allocation Board (FAB) and awarded to the company at its own choice. PTA chairman further said that due to withdrawal of ICH policy and deregulation of Approved Settlement Rate (ASR), a substantial decline has been observed in grey trafficking as white traffic increased to 1.5 billion minutes per month against 375 million. Further it gave many enticements to expatriate Pakistanis living outside the country as call rates dropped significantly, he added.

The committee suggested giving pensions to 40,000 retired employees including 13,000 widows of PTCL, as ordered by the Supreme Court. Secretary IT ministry informed the committee that Pakistan Telecommunication Employees Trust (PTET) and PTCL have filed review petitions in the Supreme Court in the case and the next date of hearing is November 10.

Anusha Rehman said directives in this concern have already been issued to implement the apex court decision, adding that a proforma has already been issued to retired employees to fill and submit. It may cost Rs 13-55 billion to PTCL to pay pensions.

Secretary IT said that until 2010, the pension increase announced by the federal government were implemented by PTET without any alteration. However, he said that the federal government announced an unusual increase in pension in 2010 which was not applied by PTET to all the pensioners.