The Federal Board of Revenue (FBR) said that mobile phone operators are charging more taxes than they transfer to government. FBR has found discrepancies in cellular companies’ billing and costing for mobile services.
Mehmood Aslam FBR Director General (Withholding) told the Senate Standing Committee on Information Technology that Telenor’s uploaded data on IT-based portal clearly shows that company has not paid Rs 267 million of taxes to the government between July and November 2017. Telenor had been asked to explain its position under Income Tax Ordinance 2001.
He further said that we want clear answers for committee from Telenor as soon as possible.
Senators will also seek audit of withholding tax collected by all telecom companies. The committee has observed mobile phone operators overcharged subscribers from last five years and were ended up paying more money for less talk-time.
Members believed that FBR does not have any mechanism to conduct audits of millions of subscribers.
Aslam told the committee that now the government is able to plug the loopholes in the existing tax collection system. To improve the revenue collection a new mechanism will help in collection from a telecom company. To ensure the effective monitoring of withholding taxes paid by the mobile operators FBR had devised an IT-based mechanism.
Aslam explained, on software utility portal all 4 mobile companies have to upload customers’ transaction data on monthly basis. He added that operators are reluctant and looking forward to Pakistan Telecommunication Authority (PTA) that will assist FBR in tax collection.
With the advent of new mechanism FBR not only check the transaction data of subscribers for the entire year, but the data of past five years as well.
“In the case of Telenor, field officers have started conducting an audit of withholding tax deducted from consumers. Similar audits for all cellular operators will be conducted by FBR to ensure better transparency”.
The tax official also claimed that four cellular mobile operators owed the government Rs89 billion in sales taxes accumulated over past several years, and another Rs62 billion in income taxes, which the operators have challenged in court.
Four cellular mobile operators owed the government Rs89 billion in sales taxes accumulated over past several years, and another Rs62 billion in income taxes, claimed tax officials.
Shahi Syed committee chairman and ANP senator, appeared disappointed and said that the FBR had not found the full quantum of discrepancies that existed. According to his calculations operators owe the government between Rs7 billion to Rs10 billion in taxes.
FBR received deadline by Senator Syed that until January 24, when the committee will meet, to submit a detailed report on taxes collected from all cellular service providers.