Tax authority freezes PTA bank accounts

Published: May 30, 2012

DEAL REACHED: 8.6b rupees were the outstanding dues of Mobilink 2.5b rupees will be paid by Mobilink while rest of the dues will be waived.

ISLAMABAD: Tax authority on Tuesday seized all bank accounts of Pakistan Telecommunication Authority (PTA) for recovering an outstanding amount of Rs3.6 billion, in a bid to achieve the revised collection target.

In a similar move, the Federal Board of Revenue last Thursday froze bank accounts of the country’s largest telecom service provider Mobilink for recovery of Rs8.6 billion dues.

“The Large Taxpayers Unit Islamabad has attached all bank accounts of PTA which owes Rs3.6 billion to the exchequer on account of income tax,” FBR said in a brief statement. FBR had earlier sent a notice to the telecom regulator to deposit the outstanding liabilities by May 28, 2012 but it failed to do so.

The PTA does not owe any dues to FBR, said PTA’s spokesman Mohammad Younus adding that “we have obtained a stay order against FBR’s decision of attaching PTA’s accounts”.

Various teams have been formed by Chief Commissioner, LTU, Islamabad to recover the amount from PTA through attachment of bank accounts and its receivables from mobile operators, wireless local loop (WLL) operators, long distance and international (LDI) operators, land line (LL) operators and IT ministry, said the FBR.

The FBR is struggling to achieve this year’s tax target of Rs1.952 trillion, which has unofficially been downward revised to Rs1.928 trillion. According to unconfirmed reports, FBR has started blocking refunds after witnessing significant shortfall in collection. However, FBR Chairman Mumtaz Haider Rizvi claims that he would prefer missing the target rather than blocking taxpayers’ refunds.

Last year, the FBR had fudged tax collection figures to achieve the collection target, which was lowered three times. I had taken Rs42 billion advances from state-owned enterprises and banks and showed them as tax collection.

The FBR’s actions indicate that the authorities were far behind the collection target, according to experts. It has already announced amnesty schemes for sales tax defaulters, for those who obtained illegal sales tax refunds in connivance of the FBR officials and for motorcycle dealers, steel millers and steel re-rolling mills.

Mobilink let off easy

In a surprising move, the FBR on Tuesday waived off Rs6.1 billion tax liabilities of Mobilink and also released its bank accounts.

According to the FBR, an understanding has been reached with the company and “Rs2.5 billion will be paid by Mobilink by May 30, 2012”. It added that rest of the amount has been waived off as the company availed tax surcharge and penalty waiver scheme of the FBR.

Earlier this week, the LTU Islamabad had attached bank accounts of the Mobilink and blocked its imports to recover suppliers of the company, which included other telecom companies as well.

However, it is not yet clear whether the FBR has the authority to waive off the penalties and surcharges in cases where the recoveries have been upheld by the Income Tax Tribunal. Earlier, the FBR said that Mobilink understated Rs8.6 billion in sales tax and federal excise duty returns.

Published in The Express Tribune, May 30th, 2012.

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