ISLAMABAD: Members of Senate Standing Committee on Finance, Revenue, Economic Affairs and Narcotics Control strongly criticised the Federal Board of Revenue (FBR) for its inability to audit telecom sector, which is not paying billions of withholding tax collected from millions of customers.
The meeting of the committee, which was chaired by its chairman Senator Saleem Mandviwalla, was informed by officials from audit department and the FBR that they have started receiving data regarding withholding tax collected by four telecom companies. As per the data, at least 98 million transactions were recorded at Telenor in July 2017 through prepaid cards, easyload, easypaisa, mobile banking etc.
Out of four telecom companies, three firms have submitted their data so far. Zong is yet to submit its reports related to withholding tax. An official of FBR informed the committee that since the board lacks sophisticated/advance IT system and software to check the huge data of telecom companies, it has been auditing the taxes in a manual system.
He said after the direction of Senate’s Committee, one month’s tax data was collected from the four telecom companies and according to which it was revealed that each firm collects roughly Rs 1 billion under the head of withholding tax making the per month total withholding tax collection by the four companies to Rs 4 billion.
“You are burdening the common people through increasing taxes and duties but not collecting the huge amount of already taxed money from the giant firms,” said Senator Kamil Ali Agha adding that the more money is theft by these companies the more chances of bribing to the collectors there is to avoid payment of huge money to government.
Mandviwalla suggested the FBR and others departments concerned to outsource the auditing system of telecom companies. The FBR officials welcomed the suggestion saying that such initiative could be taken in consultation with provinces.
FBR Member operations Khawaja Tanvir said that software has recently been developed to acquire the data of telecom sector.
He said that currently there was no special audit of mobile telecommunication companies and the exercise to determine actual taxes applicable at them is currently being conducted after the directives of the Senate Standing Committee on Finance. “Currently we get only the tax that they file themselves,” member FBR said.
Senator Saud Majeed and Senator Mohsin Aziz said that the FBR is harsh at small taxpayers and mainly the industrialists but nothing was being done to tap the available resource.
As the FBR officials failed to give a direct reply, Senator Mohsin Aziz said, “Withholding tax is collected in advance from the entities, simply look at their sales and calculate 12.5 percent tax rate, at least you will know the approximate tax applicable at each company.”
However despite repeating the same question the officials failed to respond directly but gave details about the complicated accounting procedures adopted by the telecom sector.
The Committee gave two weeks to FBR to respond with updated information in this regard.
The Committee was also briefed by NAB about the Mudarba scam, engineered by a group of clerics who syphoned off around Rs 22 billion from 31,477 claimants in the name of Islamic mode of financing.
The Committee was informed that the case was in accountability court and NAB investigations too were underway and several arrests have been made in this regard. Members of the committee mocked that they were not in a position to say anything as clerics will deliver another sermon on Friday.
The Committee was also informed by FIA about a scam related to Abandoned Properties Organisation (APO) where officials of APO, First Women’s Bank, National Bank and Habib Bank collectively defrauded APO’s money.
The FIA official informed that almost all the members of that group have been identified and booked, the case was on the court.
