Mobile phone operators deduct more tax from users but pay less: FBR

  • FBR will conduct audit of all four mobile phone companies to ensure transparency.
  • FBR asked to submit tax details of all four companies till Jan 24

ISLAMABAD – Mobile phone operating companies deduct more taxes from their users, but the payment to the government is not proportional to the collected amount, the Federal Board of Revenue (FBR) claimed.

The FBR made the claim during a meeting of the Senate Standing Committee on Information Technology, headed by Senator Shahi Syed on Thursday, while explaining discrepancies found in companies’ billing and costing process.

Briefing the committee, FBR Director General (Withholding) Mehmood Aslam stated that data uploaded by a cellular company, Telenor, on FBR’s new IT-based portal shows the firm did not paid Rs267 million in the wake of additional taxes during July-November 2017 to the government, an English daily reported.

Aslam said that an audit of data provided by Telenor regarding deduction of withholding tax from consumers was underway, adding that the FBR aimed at conducting similar audit of all four mobile phone companies to ensure transparency.

The committee observed that consumers got less talk-time despite paying more money due to overcharging by the companies over the past five years. The members also expressed fear regarding alleged tax evasion by these operators.

However, the FBR avoid confirming the allegation as it did not have proper mechanism to keep an eye on transaction data of millions of users.

However, Mr Aslam told the committee that a new mechanism developed to improve revenue collection from telecom service providers had enabled the government to plug the loopholes in the existing tax collection system.

In order to strengthen the audit system and increase revenue collection, the federal tax body had introduced new IT-based system for monitoring the withholding tax paid by the companies, he said, adding that all the companies concerned are require to upload monthly transaction data of every customer, Dawn News reported.

The FBR has been asked to submit tax details of the companies till January 24, when next meeting will be held.