Two major telecom companies—Telenor Pakistan and Deodar Pakistan (a subsidiary of Jazz)—have agreed to settle outstanding tax liabilities totaling Rs26 billion with the Federal Board of Revenue (FBR). This decision comes after both firms lost their cases in the Islamabad High Court (IHC) and opted against further litigation.
The Large Taxpayer Office (LTO) Islamabad had already initiated steps to freeze the bank accounts of these companies in an effort to recover the dues. The LTO, which operates under the FBR, even took action on a Saturday to ensure the funds were secured ahead of any potential appeals.
The move follows the government’s enforcement of the Tax Laws (Amendment) Ordinance 2025, which grants the FBR enhanced powers to recover taxes from defaulters without needing to issue new notices under Section 138 of the Income Tax Ordinance 2001.
Both Telenor and Deodar were facing tax demands related to the import of telecom equipment. Over the weekend, both firms reached a settlement with the FBR, agreeing to pay the court-determined amounts.
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Telenor Pakistan had been dealing with a Rs6 billion withholding tax case. Facing imminent account freezing, the company chose to settle rather than contest the issue in further legal proceedings.
Deodar Pakistan, responsible for managing telecom towers and cell sites for Jazz, also lost its Rs20 billion withholding tax case. Jazz’s management confirmed that they, too, will not pursue additional court action. Notably, Deodar is in the process of being sold to Engro Corporation for approximately $563 million—a deal already approved by the Competition Commission of Pakistan but currently on hold due to pending legal formalities.
Official Statements Clarify Company Positions
In a formal response, Jazz stated:
“It is clarified that neither PMCL nor its wholly owned subsidiary, Deodar, has received any adverse judgement in court, contrary to what was reported. As one of the highest tax-paying businesses in the country, PMCL has consistently fulfilled its obligations in accordance with the law. PMCL remains committed to compliance with applicable laws for all transactions, as and when required — always within the framework of the law and without compromising the rights and guarantees available under the Constitution of Pakistan.”
Telenor Pakistan also shared its position:
“Telenor Pakistan, as a law-abiding corporate entity and one of the largest contributors to the national exchequer, remains committed to complying with all applicable laws and regulations. We believe in resolving tax-related matters through due process and continue to engage constructively with the relevant authorities. While discussions with the FBR are ongoing related to the tax demand, it is important to clarify that we reserve our right to pursue appropriate legal remedies as necessary.”
