Islamabad, 12 June 2025: Jazz Loses Tax Case, the Islamabad High Court has ruled in favor of the Federal Board of Revenue (FBR) in a significant tax litigation involving a prominent telecom provider, marking a substantial legal victory for the tax authority. Pakistan Mobile Communications Limited (PMCL), which operates under the brand name Jazz
The two-member bench, led by Justice Babar Sattar, supported the FBR’s position regarding a multi-billion-rupee transaction involving the transfer of telecom tower assets.
According to case details, the telecom operator transferred infrastructure valued at Rs. 59.3 billion to a subsidiary in 2018.
The company had argued that the transaction fell under a group reorganization and should be exempt from tax under Section 97 of the Income Tax Ordinance, 2001.
READ MORE: FBR has 2 Million New Taxpayers Registered
However, the court disagreed with this interpretation. It held that tax exemptions on such transactions are only applicable if all conditions under the ordinance are strictly met.
The judges further affirmed that the FBR has the legal authority to assess tax obligations even within intra-group transfers particularly when the conditions for exemption appear unmet.
As a result of the judgment, the telecom firm is expected to face a tax liability amounting to approximately Rs. 22 billion (roughly $78 million). The court declared the earnings from the transfer to be taxable income, given the failure to comply fully with the stipulations of Section 97.
Moreover, the ruling emphasized that tax commissioners are legally empowered to calculate taxable income based on accounting income when required. This sets a clear precedent regarding the extent of FBR’s jurisdiction in complex corporate financial transactions.
In a related development, the High Court also dismissed another plea filed by the same telecom company and imposed a Rs. 100,000 penalty for what was deemed an unsubstantiated legal challenge.
The Jazz Loses Tax Case decision has been hailed by FBR officials as a strategic win that aligns with the federal government’s broader objective of securing pending national revenues through expedited legal proceedings.
READ MORE: FBR has 2 Million New Taxpayers Registered
FBR’s legal team, under the leadership of Chairman Rashid Mahmood, has been actively pursuing high-stakes litigation to recover substantial tax amounts from corporate entities.
Authorities noted that multiple multi-billion rupee disputes have already been resolved in recent months, owing to the intensified legal push. They view this latest verdict as a key step toward reinforcing rule-based taxation and discouraging evasion tactics masked under technical interpretations.
With Jazz Loses Tax Case making headlines, financial and legal analysts suggest this verdict could influence future corporate tax practices in Pakistan, especially concerning intra-group restructuring and asset transfers.
