The Federal Board of Revenue’s Large Taxpayer Unit in Islamabad on Wednesday sealed the main business premises of cellular company Jazz, alleging non-payment of Rs25.393 billion income tax for the tax year 2018.
Earlier in the day, a notice was issued to Principal Officers Pakistan Mobile Communication Limited (PMCL) Aamir Hafeez Ibrahim under Section 138(1) of the Income Tax Ordinance 2001 with a deadline to pay arrears of tax by 1:00pm on October 28.
The case is related to the acquisition of over 13,000 tower assets across the country by Deodar Private Limited, a subsidiary company of PMCL. The Islamabad LTU created the demand for tax as well as a surcharge in the tax year 2019.
The company argues that under Section 97 of the Income Tax Ordinance, gain from the sale of an asset from a holding company to a subsidiary is not taxable. According to Shabbar Zaidi, who was a partner at Ferguson’s who are Jazz’s auditors, “this section needs to be properly interpreted, some problem has arisen with the understanding of this section.”
Employees from the Jazz, speaking on condition of anonymity, told Dawn that the FBR teams swarmed into the offices of Jazz moments after serving the notice.
“They had been to our banks as well, demanding freezing of all accounts too,” they said.
