FBR seals Jazz offices on tax evasion

The Federal Board of Revenue (FBR) sealed the offices of Jazz Pakistan claiming that the telecommunication company had failed to pay income taxes worth Rs25.393 billion.

The Jazz company spokesperson said the amount was due to a misinterpretation of laws.

The company received a notice from the FBR under Section 138(1) of the Income Tax Ordinance 2001 on Wednesday with a deadline to pay arrears of tax by 1300 hours (1:00 pm) on October 28 — the same day.

Jazz spokesperson said that the company “has received a notice from FBR this afternoon. Jazz has made tax submissions based on legal interpretations of the tax owed. We will review and take measures under our legal obligations and will collaborate with all institutions for an early resolution of this issue.”

The matter of the income tax involves Jazz’s parent company — Pakistan Mobile Communications Ltd 0– purchase of 13,000 towers from its own subsidiary Deodar Private Limited.

The FBR’s Large Taxpayer Unit Islamabad had demanded tax as well as surcharge in the tax year 2019.

On the other hand, the company said that under Section 97 of the Income Tax Ordinance, any gains from the sale of an asset from a holding company to a subsidiary cannot be taxed.

A report by Dawn said that the company’s employees, without sharing their names, said that the FBR officers stormed into the premises within just moments of sending in the notices.

They said that the FBR was at the company’s banks as well, demanding freezing of all accounts too.

The short amount of time given to the company to pay its taxes and then storming into the building without any prior notice reeks of foul play on the part of the FBR.

Jazz is one of the top telecommunications companies in the country and has been a source of tax revenues and foreign direct investment into the country over the years.

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