ISLAMABAD – Leading telecom operator Jazz has been forced to settle staggering $158 million tax dispute with federal authorities in what is said to be high-profile corporate tax settlements.
The settlement came after key judgment by Islamabad High Court (IHC) that sent shockwaves through business community. The court sided firmly with the Federal Board of Revenue (FBR), ruling that Jazz’s internal corporate restructuring — once believed to be tax-exempt — was, in fact, subject to taxation.
It all started with Jazz’s 2018 move to transfer its entire nationwide tower infrastructure, valued at a jaw-dropping Rs98.5 billion, to wholly owned subsidiary. The deal generated massive Rs75.9 billion in accounting profit, and now, a hefty Rs22 billion ($78 million) tax bill.
Jazz said transaction qualified for tax exemption under Section 97(1) of Income Tax Ordinance. But court struck down that defense, saying deal real economic gain conducted at market value, making it fully taxable.
