Court grants relief to Telenor Pakistan over PKR 25 bn tax dispute

Telenor Pakistan gets a temporary relief from Islamabad High Court against the ‘attachment of accounts’ which Federal Board of Revenue (FBR) practiced on September 7th, 2016.

While taking action against an unresolved “tax dispute” belonging to the year 2013-14, FBR had earlier issued a notice and attached the accounts of country’s second largest telecom operator, Telenor Pakistan.

According to people privy to the matter, FBR and Telenor Pakistan locked horns over a tax issue amounting to Rs. 25 billion which FBR insists Telenor Pakistan did not pay.

A source at FBR on the condition of anonymity commented that during FY 2013-14, Telenor Pakistan avoided Rs. 25 billion tax by under-reporting its annual profit.

“The watchdog [FBR] had no other way but to attach the accounts of the company,” source further added.

However, Muhammad Aslam Hayat, Chief Corporate Affairs and Strategy Officer, differed with the stance of FBR. While explaining company’s point of view, he responded, “Telenor Pakistan received an alleged tax demand of PKR 25 billion from FBR based on disallowance of expenses claimed in income tax returns for tax years 2013 and 2014, the supporting evidence and audit reports of which had already been filed and verified.”

“We filed a petition with the Commissioner (Appeals) for grant of stay, but before a written order was served to the company, our bank accounts were attached. Consequently, Telenor Pakistan filed a writ petition in the Islamabad High Court for the stay order which has been granted” Hayat added further in his official statement.

The official stance does not confirm if the attachment of accounts has been undone before Eid holidays.

“Telenor Pakistan is a law abiding and responsible corporate citizen and has, over the past 12 years, contributed enormously to the economy of Pakistan by contributing over PKR 200 billion towards the national exchequer, bringing US$ 3.1 billion investment and creating over 5,000 direct and 25,000 indirect jobs. Telenor Pakistan believes in making a positive contribution and has a strict code of compliance. Therefore, we are committed to meeting all our obligations and carrying out our operations in strict accordance with the laws of Pakistan”, the statement further explains the position of Telenor.

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