Telecommunication businesses could join the long list of Pakistan’s dying industries if Pakistan Telecommunication Company Limited (PTCL) does not pay them US $ 118 million, which is owed to them. PTCL has illegally withheld this amount, equivalent to Rs 12 billion, from the International Clearing House (ICH) on the pretext of self-assumed and inapplicable provincial tax liability despite the fact that Telecom LDI services are federal subjects of taxation. The ICH would have disbursed the huge amount to all operators if PTCL had not refused to undertake the appropriate transactions as per established norms. That would have saved the telecommunications industry from financial uncertainty and a serious crisis.
The Government of Pakistan is also being defrauded by PTCL by not declaring their own profits
The International Clearing House (ICH) remained operative from 2012 till 2015 after it was formed by the government of the time. All international traffic was to be handled by PTCL and all the revenue for each operator would be disbursed by PTCL too. Pakistan Telecommunication Authority (PTA) was the guarantor and arbitrator of the ICH arrangement.
According to sources, PTCL is still refusing to release the share of the operators which amounts to approximately Rs 8 billion, including Rs 4 billion of interest incurred on the amount in five years. Some of the remaining amount belongs to PTCL itself, since it is also an operator that is not paid by its own company. PTCL could possibly be damaging itself financially using these flawed strategies.
PTCL could possibly be damaging itself financially using these flawed strategies
What makes this situation worse is that PTCL is also not disclosing the amount in their account as ‘payable funds’ to other entities. The company appears to be defrauding the operators of their share of huge amounts.
It appears that the Government of Pakistan (GOP) is also being defrauded by PTCL by not declaring their own profits of Rs 8 billion with an intention to keep the money illegally within PTCL. The GOP is a major shareholder in PTCL itself.
Even PTA was unable to get the rightful payments of operators needed to be paid by the PTCL. LDI operators have also approached PTA under ICH agreement to have their amount released but PTCL opted not to respond to PTA letters even after repeated reminders.
Published in Daily Times, March 10th 2019.