Monitoring WHT collection: LTUs, RTOs to nominate one commissioner

All Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) would nominate one Commissioner in each LTU/RTO for effective monitoring of withholding taxes under the national plan to increase revenue collection during current fiscal year for achievement of annual target of Rs 1952 billion in 2011-12.
The FBR issued instructions to all Chief Commissioners of the LTUs and RTOs on Monday. According to FBR instructions, the Board has finalised a national strategy to improve revenue collection from withholding taxes. Under the new strategy, each LTU and RTO would nominate one Commissioner for monitoring withholding tax and enforcing withholding statements for audit thereof, the FBR directive added.
Sources told Business Recorder that one Commissioner in every LTU/RTO would exclusively deal with all matters including enforcement, audit and recovery of withholding taxes in the field formations. The Commissioner would not report to the Directorate General of Withholding Taxes but he would directly report to the concerned Chief Commissioner of WHT. The FBR has decided to give top priority to monitoring and enforcement of withholding taxes during current fiscal year.
The Chief Commissioners of the LTUs and RTOs would also empower the concerned Commissioner to take action against the defaulting withholding agents for recovery of the unpaid taxes. In many cases, the withholding agents have deducted taxes but not deposited the same in the national kitty. The purpose of deputing Commissioners would exclusively complete the assigned job based on the data of withholding taxes available in the field formations.
During last Chief Commissioner conference, tax managers pointed out that if the Large Taxpayer Unit Karachi can collect huge amount of over and above Rs 4.5 billion withholding taxes during the last two months of 2010-11, the Chief Commissioners of the LTUs and RTOs have enormous potential of improving collection through proper collection of withholding taxes. By checking illegal sales tax adjustments, post-refund audit and monitoring of withholding taxes, the FBR can generate huge revenue during current fiscal year. The actual number of withholding agents is greater as compared to nearly 25,000 as mentioned by the representatives of the Pakistan Revenue Automation Limited (PRAL) during the conference. Total number of withholding agents should be at least at par with the number of sales tax registered persons, who are also required to deduct tax at different stages. These sales tax registered persons are deducting or withholding tax at different stages.
According to the estimates of tax managers, the number of withholding agents should be at least 80,000 for which a proper list needs to be updated. Tax authorities clearly spelled out the tax facilitation plan to the Chief Commissioners of the LTUs and RTOs with the resolve that taxpayer facilitation is the cornerstone of the FBR's tax policy but not at the cost of the enforcement of tax laws legal provision.