Alert Sign Dear reader, online ads enable us to deliver the journalism you value. Please support us by taking a moment to turn off Adblock on

Alert Sign Dear reader, please upgrade to the latest version of IE to have a better reading experience


Telecom saga

August 16, 2012

IT’S always easy to presume guilt, to shoot first and ask questions later. The National Accountability Bureau has taken this easiest of all roads in its dealings with the Federal Board of Revenue and the telecoms on the question of the alleged tax liability of Rs47bn that the FBR raised recently. Against a relatively routine application of executive power contained in Section 65 of the Sales Tax Act of 1990, NAB took startling suo moto action in July, and placed the names of three FBR officers on the Exit Control List. Then it summoned the telecom companies to ask why they should not be liable for the relevant taxes, and tacitly accused both the telecom companies and certain FBR officials of corrupt practices in trying to implement Section 65. The said section allows an FBR chairman to waive arrears and penal charges on a tax liability that can be shown to be revenue neutral. This means that no additional tax would accrue to the government were the liability to be implemented since it would be eligible for refund in any case.

NAB claims that the powers of Section 65 cannot be wielded by the FBR chairman alone and that the notification requires vetting by the law ministry first, which was not done in this case. Telecom representatives say they are not a party to this dispute, which strictly speaking is between NAB and the FBR. They are offended at being summoned to testify and to furnish explanations regarding the liability calculated by the FBR. It’s puzzling to see how NAB has allowed its intervention in the affair to grow, from originally taking notice of the failure of the FBR chairman to get the law ministry to vet a routine notification, to asking the telecoms to provide explanations on allegations of tax evasion. The mission of NAB itself raises questions. The public is entitled to ask what is really going on. We believe that instead of getting so deeply involved in the matter, NAB should step aside and allow the FBR or finance ministry to deal with it.