ISLAMABAD:
In a significant development in the case of Rs47 billion allegedly evaded in taxes by the five telecom companies operating in the country, the National Accountability Bureau (NAB) has recommended the names of three senior officials of Federal Bureau of Revenue (FBR) be placed on the Exit Control List (ECL).
As per an official handout issued by NAB, the names of former FBR chairman Mumtaz Haider Rizvi, Inland Revenue Member Shahid Hussain Asad, and Chief of Sales Tax/Federal Excise Duty Abdul Sattar Aora, have been forwarded to the Ministry of Interior to be put on the ECL.
The Rs47 billion includes a principal amount of Rs26 billion owed by five cellular service providers since 2007. FBR tax auditors had pointed out the discrepancy in 2010. The cellular companies in question had approached the office of the Commissioner Inland Revenue (CIR) on the matter, which had directed them to pay the tax. Following this, they went to the Appellate Tribunal Inland Revenue. The tribunal upheld the CIR’s decision and again directed the cellular service providers to deposit the tax.
The companies, however, had remained adamant not to pay the amount. They told the chief commissioner of the Large Tax Unit they were ready to pay interconnect charges applicable from July this year, provided the FBR waives off past liabilities worth Rs47 billion.
On July 4, 2012, NAB Chairman Admiral (retd) Fasih Bokhari took suo motu notice of the matter and summoned the FBR chairman to appear in person to explain details about the defaulted amount.
FBR Chairman Mumtaz Haider Rizvi was interrogated for over two hours at the National Accountability Bureau (NAB) headquarters on July 6, and was allowed to leave the premises only after he agreed not to issue a notification to write off the outstanding amount.
“The FBR chairman tried to convince FBR officials that the waiver is in line with the law and said he intended to grant it the very next day. However, he had to retreat once he was confronted with relevant evidence and supporting documents,” the head of the bureau’s media wing, Dr Ayesha Siddiqa, had told The Express Tribune.
Published in The Express Tribune, July 24th, 2012.
COMMENTS (4)
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We all are missing one important aspect of this scam and that is the dirty Tax Consulting Company; the greedy number one firm M/s A.F. Fergusons & Company - Cheatered Accountants (member firm of Price Water Copper) who are brokering between companies and Telecom Compannies. I know from my experience in big multinationals how this company is helping big companies to evade taxes. In one of the case Mr. Shabbar Zaidi managed to get the reduction of withholding tax from 8 to 6% for a non-resident company from Mr. S.A. Lal. We all must now expose these Cheatered Accountant Companies.
The so called telecom proposed waiver of Rs47 billion has been played out of proportion. At the end of the day it will emerge that it is only question of timing difference and tax involved is about Rs 100 Million or so. Having stated the above,the fact is FBR has become dysfunctional and needs a massive overhaul. Lot of dead wood of FBR should be "parked in stables"
When cheif of tax collection started writing wavers for 47billions, there is something very wrong with taxing in the country. Why the telecoms companies deserve any sympathy? they are not owned or run by poor people! Taxes has to be collected very sternly to avoid begging from IMF!
What about the Chief Commissioner LTU Islamabad--was he not the one where the cases were assessed?. Was the law Minister(y) also not pushing for this exemption? Put them all on ECL and fast track the inquiry. Punish all those who were responsible for moving and pushing the file FBR has become dysfunctional.