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FBR initiates audit to recover withholding tax

09 January, 2013

KARACHI: The Federal Board of Revenue (FBR) has initiated audit of withholding taxes to make optimum recovery following the idle position of audit of returns filed by taxpayers, sources said on Tuesday.

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KARACHI: The Federal Board of Revenue (FBR) has initiated audit of withholding taxes to make optimum recovery following the idle position of audit of returns filed by taxpayers, sources said on Tuesday.

The FBR has sent a communication to all the concerned tax departments for recovery of withholding taxes through effective monitoring and its audit.

The sources said that about Rs4.25 billion tax demand had been created through monitoring of withholding taxes and substantial recovery had been made.

The recent decisions of courts has paralysed the tax audit proceedings in the FBR as tax officials at regional tax offices (RTOs) and large taxpayers units (LTUs) have been barred from issuing notices for demanding records and conducting audits. However, they said that audit of withholding taxes was still an option to generate sizeable revenue, the sources said.

“There is no bar of audit of withholding taxes,” said an official on condition not to be named. The official said that directorate of withholding taxes had asked all the field formation to prepare their strategy for collection and sent to the FBR as earlier as possible.

The revenue body is facing massive revenue shortfall because after the first half of current fiscal year the provisional collection of the FBR stood at Rs900 billion making more Rs1,481 billion collection in remaining six months of current fiscal year.

The tax officials said that directorate of withholding taxes also directed the field formation to identify the major withholding agents for optimum recovery. “In other cases sections pertaining to fines and penalties should be invoked,” another official said.

The official said that sections 161 and 162 of the Income Tax Ordinance 2001 stated about the failure of a taxpayer to pay tax collected or deducted and recovery of tax from the person whom tax was not collected or deducted.

Meanwhile, the official added that sections 182 and 204 of the Income Tax Ordinance 2001 dealt with offences and penalties and default surcharges.

The sources said that the monitoring had been launched against sectors including banks, oil and gas, telecom, fertilisers etc.

The FBR, a day earlier, issued detailed guidelines mentioning the withholding tax rates for withholding agents, besides warning of harsh penalties in case of non-compliance.

The sources said that the FBR would demand records of withholding tax deduction and collection of past years, as there was no time restriction under the withholding regime.

End.


 
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