PRA de-seals Telenor’s head office a day after it was sealed due to tax default allegations

Update: Telenor’s provincial head office was de-sealed by PRA on Friday after a stay order was obtained by Telenor from Lahore High Court. On the direction of LHC, The Appellate Tribunal of PRA has fixed a hearing on May 9 to review the stay application of Telenor.

Punjab government has sealed Telenor’s provincial head office in Lahore after it was alleged that the telecom company hasn’t paid 1.69 billion Rupees in taxes. Punjab Revenue Authority (PRA) took this action after its commissioner of appeals rejected Telenor’s plea against the alleged tax default.

Position of PRA

Punjab Revenue Authority (PRA) claims that Telenor has failed to pay sales tax on services payable to Punjab government from July 2012 to June 2013. This tax amounts to PKR 1,612.9 million; the failure to recover that amount from Telenor has forced them to seal the cellular company’s office. While talking to Dawn News, PRA Additional Commissioner for Enforce­ment Amanullah Virk said that in the case of non-payment, PRA may seal other offices of Telenor in Punjab. Here’s what he had to say about the issue:

“We, along with the police, have sealed the provincial head office of a leading cellular company… for failing to pay sales tax on services payable to the Punjab government from July 2012 to June 2013. The company was given full opportunity to clear its position. Recently, on the order of the Lahore High Court, the commissioner of appeals reheard the case and declared that it would have to pay the tax.In view of the resultant failure to pay the amount of due Punjab sales tax, the undersigned… hereby seal(s) the business premises of the cellular company until such time as the amount of the tax is paid or recovered in full favour of PRA Lahore, to the extent of the amount of default Rs1,612.9m and penalty of Rs80.6m and gross amount of Rs1,693.6m with immediate effect.”

Telenor’s views on the matter

Telenor did not disclose any specifics about the matter at hand because the case is currently under judicial consideration. Telenor Pakistan Chief Corporate Affairs and Strategy Officer Muhammad Aslam Hayat, however, said following about the cellular company’s compliance to rules and regulations:

“We would like to highlight that Telenor Pakistan is a law-abiding and responsible corporate citizen and has over the past 12 years contributed enormously to the economy of Pakistan by contributing over Rs240bn towards the national exchequer, bringing $3.5bn investment and creating over 5,000 direct and 25,000 indirect jobs. We are committed to meeting all our obligations.”

Effect on Telenor’s services

Telenor has claimed that the closure of their head office in Lahore will have no visible effect on the services that it provides to its customers.