ISLAMABAD: The Large Taxpayer Unit of the Federal Board of Revenue in Islamabad sealed the main business premises of the cellular firm Jazz on Wednesday, alleging non-payment of Rs25,393 billion in income tax for the 2018 tax year.
Jazz: A notice was given earlier in the day to Principal Officers Pakistan Mobile Contact Limited (PMCL) Aamir Hafeez Ibrahim pursuant to Section 138(1) of the Income Tax Ordinance 2001, with a time limit of 1300 hours (1:00 pm) on 28 October to pay arrears of tax.
Aisha Sarwari, the Jazz spokeswoman, told Dawn that her company “posted a note this afternoon from FBR.” Based on legal interpretations of the tax owing, Jazz has made tax submissions. Under our legal commitments, we will study and take steps and work with all institutions to address this problem early on.
The case is linked to the acquisition by Deodar Private Limited , a subsidiary of PMCL, of over 13,000 tower properties across the country. In the tax year 2019, the Islamabad LTU generated both the tax and surcharge demand.
The corporation maintains that, according to Section 97 of the Income Tax Ordinance, gains resulting from the transfer of a holding company’s securities to a subsidiary are not taxable. “This section has to be better understood, any difficulty has emerged with the interpretation of this section,” according to Shabbar Zaidi, who was a partner at Ferguson’s who are Jazz’ auditors.
Telecom giant staff, speaking on condition of anonymity, told Dharti News that moments after serving the note, the FBR teams swarmed into the offices of Jazz. “They were also at our banks, asking that all accounts be frozen, too,” they said.
In an appeal to Commissioner Income Tax in which commissioner upheld the department’s ruling, PMCL opposed the FBRs claim for tax recovery first. The PMCL consequently appealed the Commissioner ‘s ruling at the Inland Revenue Appeal Tribunal. The Appellate Tribunal also upheld Wednesday’s order of appeal by the commissioner, and the FBR proceeded swiftly after that.
According to Sarwari, the LTU released a recovery notice for reimbursement to PMCL that the corporation challenged in the Islamabad High Court (IHC) to suspend the recovery exercise, adding that the hearing is scheduled for Thursday.
The LTU warning warned that, in the event of default, strict proceedings could be taken against the company for a period not exceeding six months from the attachment and selling of movable or immovable property to arrest and imprisonment in person.
In addition to a default surcharge of Rs3.361bn, the payable tax is calculated at Rs22.032bn for the tax year 2018.
“The tax sum against the defaulter is unpaid, while the defaulter knowingly, dishonestly and without a reasonable reason refrains from discharging tax responsibility and thereby causes a considerable loss to the national exchequer,” said the LTU Islamabad order.
The order further specified that the Jazz headquarters in Islamabad must remain sealed until the complete payment of unpaid dues or the revocation of that order.
Non-compliance / defiance of this order would be equal of obstruction in the discharge of the income tax authority ‘s duties and will be punishable for a term not exceeding one year or both on conviction with a fine or incarceration, “the order further added.”