The Federal Board of Revenue (FBR) has established special task forces in Large Taxpayer Units (LTUs), Regional Tax Offices (RTOs) and Corporate Regional Tax Offices (CRTOs) to maximise collection of withholding taxes during the last quarter (April-June) 2016-17. Sources told Business Recorder here on Thursday that the FBR has decided to further increase share of withholding taxes in the direct taxes collection from 71.2 per cent to above during the last quarter (April-June) 2016-17. Special task forces in LTUs, RTOs and CRTOs would ensure recovery of withholding taxes from withholding agents.
According to the FBR, the importance of withholding taxes vis-à-vis achievement of budgetary targets cannot he overrated. The share of collection from withholding taxes in the direct taxes collection up to March 2017 is 71.2%. It is also brought to Chief Commissioners'' attention that this year the whole month of Ramazan and the event of Eid-ul-Fitr fall in the month of June 2017 which, effectively, leaves them (tax machinery) with limited days for wholesome efforts towards monitoring of withholding taxes. This fact reiterates the need for employment of a more focused, well strategised and aggressive approach towards monitoring of withholding taxes during the period before Ramazan. Special task forces for collection of cheques and for recovery from Arrear and Current Demand may be established, the FBR said.
Furthermore, since two salaries will be disbursed during the month of June, an arrangement for timely deduction and deposit of tax under section 149 of the Income Tax Ordinance 2001 may be made with withholding agents. This exercise needs more vigilance and active liaison with the withholding agents of private sector salaries. They should be sensitised about this at the earliest because 80% of collection under section 149 (salary) of the Income Tax Ordinance 2001 is contributed by private sector salaries, the FBR added.
The FBR said that there is no denying the fact that collection from withholding taxes is one of the main objectives of the FBR while achieving the budgetary target. Up to March, 2017, 71.2% of the withholding taxes'' share in the achievement of the overall budgetary target requires a focused strategy by the field formation. To discuss the withholding strategy in order to achieve the budgetary target a video linked conference was held at the FBR which was attended by the whole team of Commissioner Withholding Zone. The top priority agenda for the conference was the collection out of withholding arrear, current and sates tax demand.
Copyright Business Recorder, 2017