Presently, four Mobile/Cellular Telephone Companies – M/s Telenor Pakistan (Pvt.) Limited, M/s. Pakistan Mobile Communication Limited (Mobilink), M/s. Pak Telecom Mobile Ltd. (Ufone) and Ms. CM Pak Ltd. (Zong) – are operating in Pakistan and, in the process, are generating a massive volume of customers’ transactions running into millions on a daily basis.
Considering the massive challenge of analysing transactional data of millions of people, FBR has launched a pilot project – an IT-based electronic data sharing link – for uploading of subscribers’ withholding transactional data for conducting meaningful audit of withholding taxes.
Under this project, all four Cellular companies are now uploading their transactional data through IT/PRAL provided interface since July 2017. The PRAL team remains in constant contact with the Telcos’ technical teams to resolve any issues related to harmonization of data as per format.
To start with, the data uploaded on the IT-based electronic data sharing link by M/s Telenor Pakistan (Pvt.) Limited was picked up for withholding audit for the months of July to September 2017. A team was constituted, headed by the concerned Additional Commissioner (IR), with inclusion of members from the IT/PRAL Wing.
The team has conducted on-site visit for cross matching of withholding data uploaded by M/s Telenor Pakistan on the above mentioned link, for about 40 million customers.
During the team’s visit, M/s Telenor explained the main components of their system – the Voucher Management System, Warehouse Management System and ATM Top-up Mechanism.
Initial data analysis has reflected a small deduction of tax amounting to Rs. 267 million. This default is primarily due to non-deduction of withholding tax upon cards sold/balance used in FATA/PATA. M/s Telenor Pakistan was bound to withhold income tax.
Proceedings in this case under the Income Tax Ordinance 2001 are underway. Further progress will be shared in due course of time.
The withholding tax audit of other Telcos would be carried out after taking into account the outcome and inference(s) drawn from the withholding audit of M/s. Telenor Pakistan (Pvt.) Limited.