Buzz

Jazz Deferring 25 Billion Taxes in Selling on Cash and Paying Taxes on Delays

Published

October 29, 2020

Times Read: 9,134

5 minutes

Imagine a world without the Internet today on this International Internet day. But in Pak, Telecom and Broadband companies are subject to the worst harassment. Jazz, the largest foreign investor, infrastructure provider, and biggest job creator in Telecom, was subject to intimidation and humiliation by trigger happy taxmen. The difficulties of business are on increase. Government officials’ colonial mindset is at its peak. There has to be a revolution against this regressive mindset else we remain in the dark ages.

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 1300 hours (1:00pm) on October 28.

Jazz spokesperson, Aisha Sarwari, told Dawn that her 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 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 surcharge in the tax year 2019.

FBR: extortionist & failed agency

The Amount of Corruption done in Pakistan DAILY is Rs. 8,000,000,000 (£ 53,000,000 / $ 85,000,000) – National Accountability Bureau. The vision statement of NAB is: “The National Accountability Bureau is to be a credible, effective, efficient, and dynamic anti-corruption organization creating an enabling environment for a corruption-free society.” The actual performance cannot be further off from this vision. From the appointment of the head of NAB to the appointment of its director-general, there are multiple scandals of out-of-turn promotions and corruption.

Tax officials exercise their power in cases of non-compliance. This cannot be sorted out through social media. However, businesses work their ways. Are they working purely for welfare? People who have never had anything to do with making an earning in the market are running this country. This is called naukar shahi! Just one glimpse at this news can give you an idea. The organization which is responsible for the destruction of Pakistan now wants to destroy the only documented economy and does not want to give them Rishwat and other benefits? Mobilink/Jazz/Orascom/Vimplecom/Veon whatever you want to name them, invested for profit. Why would they invest where they have no profit. The exactly same reason how did Mobilink became Jazz after merger with WARID.

Gen. Zia was on an official visit to America with his wife. His flight was scheduled to take off from Islamabad and land at New York airport. Because it was an official visit, several gifts were also loaded on the flight to be given to counterparts in the United States. Among those gifts, were the marble lamps, requested by an official accompanying Zia-ul-Haq to his visit to America. The flight was scheduled to take off from Islamabad International Airport but at the last minute, plans were changed. The itinerary changes in last-minute caused several misunderstandings and mishaps in the planning, the flight took off from Islamabad, and went through Iran and Iraq before landing at New York airport but those marble lamps remained behind because the extra cargo was added in flight. No one knew who was the owner of these marble lamps left behind on Islamabad airport, after fruitless inquiries by airport management, FIA was called. Federal Investigation Agency took possession of marble lamps and found them stuffed with heroin. The agency made several arrests and trail led agency’s officials to a serving captain named Capt. Qamar of Pak Army. He was ADC — aide-de-camp — to Gen. Zia and was known as General’s “adopted son”. Though no one dared to say in open, It is said that it was General Zia’s wife Shafiqa who forced Zia to save the captain. So, instead of being court-martialed, the young captain was released and later inducted in civil services. This Captain Qamar Zaman is now chairman of the National Accountability Bureau (NAB) and doing accountability of corrupts in Pakistan.

The FBR has been extremely reluctant to touch the people mentioned in the Panama Papers leaks who have been involved in tax evasion. The reality is that we have an Accountability Bureau with arbitrary powers and no accountability to anyone. The PTI chief tells Qamar Zaman Chaudhry that after his death he will be “accountable to Allah and not Nawaz Sharif”. They have issued notices to them but have hardly followed upon them, and have not clearly stated when, how, and who are going to be prosecuted for the billions that have escaped Pakistan into the safe havens of Panama.

Read: Slow Internet Drives Online Business at Snail Speed due to PTA Blocking Gateways

In a country where less than 10% of businesses pay tax, the PM asks the accountability bureau not to take accountability. Whereas, PM had advised NAB in the past not to harass investors and businessmen. Upon court orders and its failure to pursue the investigation in real terms, NAB closed the investigation against Ishaq Dar, Khawaja Saad Raffique, Khuram Dastgir, Shahbaz Sharif etc. Such investigations were dating back and initiated as early as in 2001 during the Musharraf regime. We need someone ballsy enough to close down this dummy NAB and then start up something that actually functions and holds people accountable independent of any influences whatsoever! re should be some sort of punishment for launching a false case or poor evidence or lack of evidence for investigating officer if the case fails in court.

The FBR is neither is autonomous nor is it credible. It continues to follow the command of the Government. Why is it that the media is so unfocused on the real reasons and background of persistent endless and blatant corruption right in front of the eyes of this nation? Media has not played the role of ombudsman but rather it has stabbed the nation in the back by collaborating with the corrupt rulers. Play your part!

Most people don’t know the reason for this tax demand. Jazz carved out its towers in its wholly-owned subsidiary called Deodar back in 2017. Tax guys say since you have “sold” these towers to your own company, please pay 22 Billion tax and 3 Billion as a surcharge. This tax demand is nothing to do with business as usual taxes or with those that Jazz collects from customers on behalf of the government. The country runs on taxes and when such an organization (who charges tax from customers) but doesn’t pay to government… This has to happen. Lit the candle in the prevailing darkness; everyone responsible should pay taxes. They should have paid taxes. If they were working in any other country such action would have been taken long ago.

This is what they had to say:

Jazz (formerly Mobilink) regretfully condemns sealing of its head office yesterday by FBR. The company’s head

office in Islamabad was sealed by tax authorities yesterday on plea of a tax recovery notice for a disputed

amount of PKR 25 Billion from 2018 which is under dialogue and under legal proceedings.

It is mentioned for record that despite the notice and proceedings on the disputed amount, Jazz is still

amongst the largest taxpayers and contributor in Pakistan with PKR 251 Billion tax deposited during the last

six years and is amongst the biggest foreign investor with over US$ 9.5 Billion over the last 25 years. Jazz has

always been a law-abiding corporate citizen and has been in the forefront for contributing in Pakistan’s

economy in monetary and development terms, and also as the market leader in telecom and internet services

with 63 Million customers. The company has also discharged its social responsibility in floods, earthquakes and

recently in Covid response worth over PKR 1.2 Billion relief.

Jazz believes in digital Pakistan vision and for digital inclusion and acceleration for the larger population and

has been walking in support with the all the Government and ICT sector initiatives. Moreover, our company

has gone to undertake projects in FATA area and are working to connect the unserved population and connect

them with rest of the country.

It is very unfortunate and disturbing that Jazz head offices are sealed along with other threating coercive

measures by tax authorities, due to which our corporate reputation and pride has been hurt and has shaken

the confidence of foreign investors of Jazz and others. It is beyond our comprehension that despite being the

largest taxpayers and a well-respected corporate, we are treated in an unfortunate way.

Jazz has assured all authorities that the company genuinely seek resolution of the matter and have always been

willing to conduct dialogue as well our right for legal course to reach merit and right interpretation.

In view of the above, we request the concerned authorities to please allow respectable time and treatment/

and right to pursue dialogue/ legal course so that the matter can be settled, instead of sealing offices and

similar threatening measures, which will not only hamper our operations, but will shake the confidence of

investors, hamper FDI’s and trust of our 63 million customers. This will also hamper the confidence of foreign

investors.

Jazz also assures its valued customers that despite the challenges, our teams will continue to work in the

field and provide uninterrupted services.

All our educated wanted to bring someone who’s never done any business! Last year (2019), Pakistan had a budget of around $46 billion with an annual deficit of roughly $18 to $20 billion. Government receives only 10% of the country’s GDP in all types of taxes – including GST. Indians pay 15%, Denmark pays the highest (45%). During 2019, Pakistan’s tax revenues were mere $36 billion – out of which only $3.6 billion were collected in income taxes by the Government from a tiny population of two million (1%) registered filers in the world’s 5th largest country. In India, registered filers are 2%. Our enemy India is far progressive in this field and we are far behind if an incompetent Government imposed in the country. 70 years since independence who is responsible for the Misery of Pakistan. Law needs to be implemented.

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Jazz is a tax defaulter and should be dealt with. Guilty unless proven innocent.