Telco Charges High Taxes While Pay Less to Govt: FBR

FBR reported that mobile phone operators overcharged subscribers and deduct more taxes while pay minimum taxes to the government. Telco Charges High Taxes While Pay Less to Govt: FBR.

Sometimes ago The Federal Board of Revenue (FBR) executed a new system for cellular companies for real time collection/payment of withholding tax from its users. Before that there wasn’t an effective tax collection system in Pakistan.

Telco Charges High Taxes While Pay Less to Govt: FBR

After sometimes a meeting of senate standing committee on Finance enlightened the capacity constraints of FBR was held. The committee was headed by Senator Saleem Mandviwalla. The committee had called FBR for an update on audit of telecommunication companies. Telecom operators were reluctant to share customer data with Federal Board of Revenue however after the involvement of PTA, this issue was resolved. A representative from FBR revealed that a new software has been designed for collection of biweekly data from telecom operators.

On the new software, Telecom operators would have to provide information customer wise usage of phones credits. It also includes easy loads and calling cards used per month. This information was rechecked and matched by monitoring officer.

Now the Federal Board of Revenue (FBR) has revealed that there are discrepancies in cellular billing and costing of cellular companies for mobile services. FBR claimed that mobile phone operators deduct more taxes from consumers but they transfer less to the government.

FBR Director General (Withholding) Mehmood Aslam told the Senate Standing Committee on Information Technology on Thursday:

“Data uploaded by Telenor on FBR’s new IT-based portal reflects that the company has not paid the government Rs267 million in additional taxes between July and November 2017,”

However Telenor had been asked to explain its position.

Mr Aslam said:

“In the case of Telenor, field officers have started conducting an audit of withholding tax deducted from consumers and deposited at the company’s premises. FBR will conduct similar audits for all cellular operators to ensure better transparency,”

Telenor Pakistan has responded to FBR‘s tax allegations. Kamal Ahmed, Chief Corporate Affairs Officer, Telenor Pakistan said that Telenor Pakistan has been making a positive contribution to the society and economy and is one of the largest contributors to the national exchequer. Through our Code of Compliance we are committed to meeting all our legal obligations and carrying out our operations in strict accordance with the laws of Pakistan while upholding the highest standards of corporate ethics and integrity.

Kamal Ahmed, Chief Corporate Affairs Officer, Telenor Pakistan clearly mentioned in a statement:

 we received a notice from FBR on 4 January 2018 over short deposit of withholding tax amounting to PKR 267M for the period July-Sep 2017. We disagree with FBR’s contention in the aforesaid notice and have responded with the verifiable details of tax payments provided during the audit and requested the withdrawal of this notice. We can confidently claim to have carried out all our statutory fiscal obligations. As one of the highest taxpayers, over the past 12 years, we have contributed over PKR 275B to the national exchequer in the form of direct and indirect taxes. We have policies and procedures in place that ensure strict adherence and compliance to all taxation rules and regulations.

While FBR had devised an IT-based mechanism to ensure the effective monitoring of withholding taxes paid by the mobile operators in order to analyse millions of transactions from each cellular company on a daily basis.

With this new mechanism, all mobile opertators are required to upload their monthly customers’ transaction data on the software utility portal. FBR can now check the transaction data of subscribers for the entire year.

Read Next: FBR to Conduct Audit of Telecom Operator

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