Transparency International Pakistan (TIP) Monday recommended the Federal Board of Revenue (FBR) Chairman, the top revenue collecting agency of the country, to make a foolproof system for the transfer of general-sales-tax (GST) collected on sale of pre-paid cards by five Cellular Companies, PTCL, wireless phone and Internet Companies.
The recommendation has been made after a tax evasion scam surfaced after the national accountability bureau (NAB) launched investigation into tax-evasion amounting to Rs 47 billion against five major telecom operators.
This allegation however has time and again been denied by telecom operators as well as the FBR. The NAB also moved an application with the apex court to put FBR officials’ names on the exit control list (ECL).
In a letter sent by TIP advisor Syed Adil Gilani to FBR Chairman Ali Arshad Hakeem, TIP said the prepaid cards were being sold by five Cellular Companies, PTCL, wireless phone and Internet Companies to outlets/shopkeepers in cash by all these companies, and then the outlets sell them to public. “The FBR may make a policy, and direct all Cellular Companies, PTCL, wireless phone and internet providers to get the pre-paid cards stamped as GST collected, and numbered by the FBR prior to sale. These companies shall deposit the 19.5% GST when they take the delivery of pre-paid cards duly stamped and numbered by FBR,” suggested the TIP.
Gilani said through introduction of this new system, the leakage of GST on prepaid cards will be stopped and the FBR was expected not only to collect 100% GST on prepaid cards (in the TIP suggested system estimated to be 8-10 billon monthly).
“This will also enable savings on loss of bank interest on the delayed deposit of GST of 30 days as per current procedure, which will add billions of rupees revenue to the exchequer”.
TIP floats proposals to FBR for bringing telecom, internet companies under GST net
