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Mobilink, Jazz: Telecom company accused of non-payment of Rs 25 billion in taxes, FBR seals company office

 

The Pakistan Federal Board of Revenue (FBR) has sealed the company's office in the federal capital, accusing Pakistan's largest telecom company Jazz (formerly Mobilink) of non-payment of Rs 25 billion in taxes.

A notification issued by the FBR's Large Tax Peers Unit claims that Pakistan Mobile Communications Limited (PMCL) ie Jazz is a non-payer of income tax of more than Rs 25 billion. Due to this, the office in Islamabad is sealed.

According to the FBR notification, "Pakistan Mobile Communications Limited deliberately did not pay income tax and made illegal excuses for it and caused huge damage to the national exchequer."

Pakistan Mobile Communications Limited has denied the allegations but confirmed that Jazz's office in Islamabad has been sealed.

When contacted, FBR spokesperson Nadeem Rizvi declined to give further details, saying: "The FBR has 2.5 lakh subscribers. I am not aware of the details of each case. I will contact the relevant authorities.


"Jazz is a law-abiding company," Ayesha Sarwari, Jazz's director of communications, told the BBC. Yesterday we received a notice from the FBR for non-payment of taxes and sealing of the office.

 matter will be taken up with the concerned agencies for mutual consent and understanding". Will be resolved under.

What is the tax dispute between FBR and telecom company?

Telecom company Jazz has formed a subsidiary called Deodar Private Limited which installs mobile towers for Jazz and Jazz installs mobile signal towers in various cities across the country through its subsidiary.

The FBR is of the view that the telecom company Jazz did not pay income tax on the profits earned from its subsidiary. However, the legal and audit team of the telecom company is of the view that under Pakistan's income tax laws, the company is not obliged to pay income tax on transactions with its own subsidiary.

Ayesha Sarwari, Communications Director, Jazz, while confirming the dispute with the FBR, said, And so far the position is that our interpretation of Article 97 of the Income Tax Act under Pakistan's Income Tax Law is correct and we are not a tax evader.

 the same time we took up the matter," he said. He had also obtained a restraining order from the Islamabad High Court.

"But when our appeal was rejected by the appellate tribunal, the restraining order obtained from the Islamabad High Court in accordance with the law also expired," he said.

Talking about the FBR's move to evade taxes on the company and seal its head office, Ayesha Sarwari said, “The company has been operating in the country for the last 25 years and is important in the country's economy. You take care of some business ethics and give the company some time while dealing with the role it is playing, but the FBR took the opportunity and immediately took serious action.

"Just hours after receiving the notice, the FBR team broke into the office and tried to harass our staff and threatened to arrest us," he accused the FBR.

"Our entire staff was worried about what had happened, whether there had been a raid or what had happened," she said.

Criticizing the FBR's move, Ayesha Sarwari said, "At a time when your economy is sinking and at a time when the country's largest companies are suing domestic companies instead of paying taxes, It is not appropriate for me to create such a climate of fear with a company that has been contributing to the country's economy for 25 years.

Ayesha Sarwari says, "There is still a dispute between the FBR and Jazz on this point. If the court tells us, we have no problem in paying the tax, but the action taken yesterday was not necessary." ۔ '

"The use of force by government agencies means that things are not being handled by you and you are pursuing a policy of harassment instead of giving a formal opportunity to any corporate body," he said.

"On the one hand, we get an award from the FBR every year as the country's biggest income taxpayer. On the other hand, this initiative comes to the fore. There is a lack of communication between government agencies," he said. The move is tantamount to trying to undermine the country's ease of doing business, as well as expelling investors from the country.

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