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Cellular Companies Are Deducting Extra Taxes from Consumers

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FBR has found some inconsistencies in the taxes cut by cellular companies. FBR claims that mobile services are deducting extra taxes from consumers and transferring less to the government.

FBR Director General Mehmood Aslam spoke to the Senate Standing Committee on Information Technology and said, “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.”

Telenor has been asked to clarify its position, he added, “As soon as Telenor responds to our queries, we will have clear answers for the committee.”

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The committee noted that from last five years the cellular companies are overcharging the users. The subscribers unknowingly are paying more money for less usage. Also, the members of the committee believed that the cellular companies were avoiding taxes. FBR lacks a system to conduct an audit of the thousands and millions of user transaction data cannot confirm this claim.

Mr. Aslam did inform that a new system is being created that will help the government to collect revenue from cellular providers. He said that FBR has developed an IT-based mechanism to monitor the millions of transaction data and ensure that exact withholding tax is paid to the government of mobile phone operators.

Telenor, Zong, Mobilink, and Ufone are asked to upload all their transaction data per month on software utility portal.

Mr. Aslam said, “The operators were initially reluctant to cooperate until the Pakistan Telecommunication Authority was asked to assist FBR in improving its tax collection mechanism.”

Specifically for Telenor, 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.”

Mr. Aslam informed, “According to my calculations, operators owe the government anywhere between Rs7 billion to Rs10 billion in taxes.”

PTI Senator Azam Swati said that tax evasion is theft, “FBR should conduct withholding tax audits of cellular firms for the past ten years”.