Proposed amendments in Finance Bill: Telecom operators seek SIFC’s intervention

ISLAMABAD: Telecom Operators Association has sought Special Investment Facilitation Council (SIFC) intervention for abolishing proposed amendments in the Finance Bill 2024, including Rs100-200 million fines on the telecom sector under the Income Tax General Orders (ITGOs) as well as 75 percent advance tax on mobile services for non-compliant tax filers.

The association in a letter written to the SIFC, argued that their system currently lacks the capability to distinguish between compliant and non-compliant tax filers for withholding tax purpose. With over 180 million subscribers, implementing such amendments at this juncture is operationally unfeasible and impractical.

In the letter, the association urged SIFC to withdraw “punitive measures” proposed in the Finance Bill 2024-25. It also requested to review and abolish the 75 per cent advance tax on mobile services for non-compliant non-filers.

Alarm raised over proposed taxes on mobile handsets & telecom services

The association said the proposed fines of Rs100 million and Rs200 million every fortnight for ITGO implementation by the telecom sector, especially targeting non-tax filers, are deemed discriminatory and unjust. These fines, seen as punitive against telecom operators who play no direct role in tax filing compliance, deter foreign investment.

The association has requested the withdrawal of these fines, a move also supported by the Senate Committee.

In terms of the 75 percent advance tax on mobile services, the association lamented the operational challenges in distinguishing between compliant and non-compliant tax filers among the 180 million subscribers currently active in Pakistan. The letter said the current system lacks the capability to implement this measure effectively and urged a review and abolishment of this amendment.

The association appreciated the cooperation of Finance Minister Muhammad Aurangzeb and chairman FBR on this matter and assumed their commitment to assisting the FBR in achieving its goals wherever possible.

“In view of the given challenges faced at our end and deliberated in detail these measures/proposals in the Fiscal Bill 2024 are unwarranted, therefore we urge for the immediate withdrawal of these proposed amendments from the Finance Bill 2024-25 due to time constraints,” the letter noted.

Copyright Business Recorder, 2024