ISLAMABAD: The Federal Board of Revenue (FBR) said on Thursday that it did not possess the mechanisms to conduct a forensic audit and confirm if cellular companies are evading taxes.

`We have recommended that the government hire the services of an international auditor for a detailed audit of the five cellular companies. The terms of reference (TORs) to hire a foreign auditor have been forwarded to the concerned departments for further action,` FBR chief revenue operations Shad Mohammad told the Senate standing committee on information technology.

Mr Mohammad informed the members of how the FBR relied onrevenues declared by cellular companies.

The committee met to discuss various issues such as the implementation of its recommendations, the issues of pensions of the Pakistan Telecommunication Company (PTCL) employees, fraudulent mobile phone messages and methods of tax collection from cellular companies.

Three years ago, Senator Rubina Khalid had raised the question whether cellular companies were evading taxes.

The senator believed that cellular companies were not depositing taxes deducted from prepaid phone cards in the government accounts.

In the previous meetings Ms Khalid and other members had demanded a forensic audit of all the cellular companies to confirm whether the money charged from consumers was being collected by the government.

However, Mr Mohammad told the committee that the FBR did not possess the means to confirm whether or not the cellular companies were evading taxes.

`FBR lacks the expertise to carry out a forensic audit.

However, it has held meetings with representatives from cellular companies who have briefed us on how consumers are charged taxes,` he said.

He explained that over the last eight months, the FBR had been monitoring the returns filed by cellular companies and found variations.

`We suspect that cellular companies have been hanging onto withholding tax they charge their subscribers,` Mr Mohammad said.

The Senate committee expressed its displeasure with the IT ministry for not implementing the members` recommendations to increase the pensions of the PTCL employees.

On September 15, committee chairperson Senator Shahi Syed had given the IT ministry a month to implement a June 2015 Supreme Court judgment in favour of the PTCL employees thatordered anincreasein their pensions.

The committee took up the matter to learn why the Supreme Court judgment had not been implemented.

Just as he did last month, Mr Syed was unwilling to reason with the ministry officials.

While a legal member of the ministry explained that the apex court directions ignored the rules and limitations of the Pakistan Telecommunications Employees Trust (PTET) which decides pension rates some of the more vocal members of the committee, such as Mr Syed, Rehman Malik and Syed Shibli Faraz, only wanted that the PTCL increase the employee pensions in light of the Supreme Court decision.

According to Secretary Azmat Ali Ranjha, the pensions of PTCL employees were increased by 20 per cent in 2010. However, the company only increased the pensions by eight per cent.

Mr Ranjha, who is also the chairpersonof the PTCLBoard, said the 20 per cent increase in pensions was too high.