President Upholds FTO’s Decision on Telecom Operators’ Cases

In a significant development, President Asif Ali Zardari has upheld the decision of the Federal Tax Ombudsman (FTO) in favor of the Federal Board of Revenue (FBR) regarding tax disputes involving telecom operators. The FTO had found no evidence of maladministration on the part of the FBR during the implementation of the Alternate Dispute Resolution Committee’s (ADRC) recommendations.

The telecom operators had filed complaints against the FBR, alleging various tax disputes spanning from 2006 to 2017. These disputes arose from amendments made to the companies’ income tax returns, resulting in reduced assessed tax losses and subsequent legal battles with the Large Taxpayer Office (LTO).

Seeking to resolve these long-standing disputes, the telecom operators opted to pursue settlement through the ADRC. The ADRC, established under Section 134A of the Income Tax Ordinance, 2001, provides a mechanism for settling disputes outside the regular appellate process.

After thorough deliberations and consideration of the evidence, the ADRC issued recommendations for the settlement of the disputes. These recommendations included the payment of Rs 8.25 billion by the telecom operators against income tax demands/liabilities from 2009 to 2021.

However, the telecom operators subsequently filed complaints with the FTO, alleging that the FBR had acted inappropriately in implementing the ADRC’s recommendations. The FTO conducted a detailed investigation into the matter, examining the actions of both the FBR and the telecom operators.

Following its investigation, the FTO concluded that there was no evidence of maladministration on the part of the FBR. The FTO found that the FBR had acted in accordance with the ADRC’s recommendations and had not engaged in any wrongdoing.

The FTO’s decision was subsequently challenged by the telecom operators, who appealed to the President for review. President Zardari, after carefully considering the matter, upheld the FTO’s decision, confirming that the FBR had acted appropriately in implementing the ADRC’s recommendations.

The President’s decision is a significant victory for the FBR, as it validates the FTO’s findings and reinforces the FBR’s authority in enforcing tax laws. It also serves as a reminder of the importance of the ADRC as a mechanism for resolving tax disputes in a timely and efficient manner.

The resolution of these long-standing tax disputes between the telecom operators and the FBR is a positive development for the Pakistani economy. It demonstrates the government’s commitment to resolving disputes through alternative dispute resolution mechanisms and promoting a fair and equitable tax system.