FBR Looking to Conduct Forensic Audit of Mobile Phone Companies

The Federal Board of Revenue (FBR) is looking at options to undertake forensic audit of cellular mobile operators as provinces expressed reservations over tax deduction/collection by the telecom companies, told a FBR representative to Senate’s Standing Committee on Information Technology and Telecommunication.

FBR representative, while briefing the committee, said that provinces aren’t convinced with tax collection mechanisms of mobile phone operators and since Pakistan Telecommunication Authority has no way of cross-checking the data that telcos provide, there is a need of forensic audit of mobile operators.

FBR representative was particularly concerned about the fact that there is no possible method of cross-checking the data that mobile phone companies provide to tax authorities.

He said the Board has already decided to conduct forensic audit of these companies for which services of foreign consultants are required as no local expertise is available for such forensic audit.

The terms of reference (TOR) for hiring consultants, he added, have been finalized in consultation with provincial authorities, as majority of taxes go to provinces, and necessary changes in tax laws have been made authorizing the FBR for outsourcing the audit.

Anusha Rehman, state minister for information technology, in response said that majority of telecom consumers do not file their returns and this is an area where FBR should be putting more efforts.

She said that telco’s data could be easily cross-checked if mobile phone subscribers file their returns for the withholding tax that is deducted by telecom operators. She emphasized that FBR has largely remained unsuccessful in creating awareness in consumers about filing their returns.

Dr. Ismail Shah, Chairman Pakistan Telecommunication Authority, who was also present in the meeting stressed that telecom sector pays highest amount of taxes to government. He further emphasized that authority is completely satisfied over the tax system in telecommunication companies.

Committee said that matter will be further discussed and deliberated to reach a conclusion during future meetings.

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