Inter-connect charges: National Accountability Bureau completes inquiry of Rs 47bn tax evasion
ISLAMABAD: The National Accountability Bureau (NAB) has completed inquiry of Rs 47 billion tax evasion in inter-connect charges and with approval of the NAB chairman, formal investigation would be started within the next two weeks and a reference against the Federal Board of Revenue (FBR) officials and mobile phone companies is to be filed in the court of law.
NAB Special Operations Director Zahir Shah informed the National Assembly’s Sub-Committee on Information Technology, which met at the Parliament House with MNA Anusha Rehman Khan in thew chair established for preparations of the recommendations on this issue. The NAB director categorically said that crime has been established in Rs 47 billion tax evasion case of telecom companies and NAB intends to proceed against the involved tax officials and cellular companies involved in the scam.
The NAB director also challenged the constitution of Alternate Dispute Resolution Committee (ADRC) for the settlement of this dispute between FBR and mobile phone companies and informed the committee that both the parties are part of the case and any decision taken under ADR mechanism would be acceptable for NAB.
NAB’s director told the sub-committee that the offence has been well covered under the NAB Ordinance, evidence has been collected and inquiry of the case has been completed. The crime has been committed by both the sides including FBR officials as well as telecom companies and NAB intends to go ahead with the case. The prima facia role of the FBR officials has been identified during the inquiry.
The NAB officials would meet FBR Chairman Ali Arshad Hakim on coming Saturday to take him into confidence before taking action against the involved officials.
After meeting with the FBR chairman, we will take the final decision on the case. Further progress is expected in the next two weeks on this case, he added.
To a question, he informed the chairperson the reference against FBR officials and mobile phone companies is not ready and inquiry report would be placed before the executive board of the NAB headed by its chairman for obtaining permission for initiating formal investigation and subsequently filing of reference against the involved in this case.
Briefing the committee on the latest status of the case, Shah stated that the NAB analysed all aspects before taking any action to ascertain whether such action is admissible or not. The NAB has completed its homework and opinion of experts has also been taken in the telecom scam. The bureau has obtained all necessary documents from the FBR required for the investigation.
The NAB has provided opportunity twice to the telecom operators to submit their statements. Similarly, the viewpoint of the FBR officials has also been heard and statements have been recorded. By the end of the current week, NAB officials would meet the tax authorities and apprise them about the case. The approval of the NAB chairman would be taken for initiation of formal investigation against all those involved in the scam.
He said that the FBR is a national institution engaged with the task of revenue collection. We do not want to malign the whole institution as only a few tax officials have been involved in the tax evasion scam of telecom sector.
While strongly opposing constitution of the ADRC, the NAB director informed the committee that the element of corruption has been established in the scam. Two to three officers of the FBR have been considered as accused in the scam. The institution involved in the wrongdoing could not be the authority to take decision in this regard. Thus, constitution of the ADRC comprising tax officials and telecom companies has been opposed by the NAB.
Before formal announcement of the NAB director for proceeding against FBR officials involved in trying to allow exemption of billions of rupees to mobile phone companies, there was a broad consensus between members of the committee and FBR officials that both sides must resolve this issue within a month’s time through the ADR mechanism. It was also proposed that those companies against whom no demand has been created could apply to the ADRC and any decision on applicability of tax on inter-connect charges should be communicated to them as well.
Tax adviser to mobile phone companies also informed the committee that tax on inter-connect charges applicability is not applicable on mobile phone companies but PTCL, SCO and NTC are also part of the industry. Any decision on inter-connect charges would be equally applicable on such companies.