Pakistan Telecommunication Authority (PTA) has issued 850MHz spectrum (3G/4G) license to Telenor Pakistan after it paid withholding tax of Rs 4.13 billion ($39.5 million). Telenor had earlier refused to pay withholding tax of $39.5 million, ie 10 percent of the total auction price ($395 million) of next generation mobile services (3G/4G), while terming it unlawful, baseless and based on a gross misinterpretation of provision of the law. Telenor had filed petition in Islamabad High Court (IHC) against the federal government including FBR and PTA.
After hearing both the parties; Telenor as well as the federal government, Islamabad High Court had reserved the judgement, however later the telecom company reached the Court while pleading that it may be allowed to pay the withholding tax, Chairman PTA Syed Ismail Shah told Business Recorder here on Friday. After getting court''s nod, Telenor deposited $39.5 million to Federal Board of Revenue (FBR) and the latter (FBR) subsequently issued Non-Objection Certificate (NoC) to PTA for issuing 4G license to the company, said Chairman PTA.
FBR in the NoC (copy available with Business Recorder) states, "It is intimated that M/s Telenor Pakistan Limited has directly deposited advanced tax amounting to Rs 4,127, 750,000-vide PSID 20280945 in accordance with the provision of section 236A of the Income Tax Ordinance 2001, thus absolving the PTA from fulfilment of its responsibilities as a withholding agent. Large Taxpayers Unit Islamabad has no objection on issuance of 4G license to M/s Telenor Pakistan (Pvt) Limited being the successful bidder."
PTA chairman said that the license has been issued and Telenor can now provide 4G services in the country. He further said that Telenor had already deposited half of price, ie $197.5 million while the remaining 50 percent will be paid in five equal annual instalments along with cumulative mark-up @ LIBOR + 3 percent from effective date of license to date of payment.