FTO tells FBR to assist WHT agents through IT solutions

ISLAMABAD: The Federal Tax Ombudsman has directed the Federal Board of Revenue (FBR) to facilitate withholding agents by evolving a transparent information technology (IT) solution.

In this regard, the FBR has issued an order on Tuesday.

Briefly, the complaint had been filed on account of hardships caused by the process of verification of tax challans in terms of withholding tax on the transfer of property the complainant stated that they have to undergo a lengthy process for getting PSIDs and making deposit in bank and then obtaining challans and conveying it to FBR office for getting it endorsed and verified and the property registering authorities had been compelled by the FBR Authorities not to entertain the registration of transfer without getting the tax challans verified from the FBR Office at Quetta.

It further added that the FBR Authorities have delegated powers to withholding Authorities and they are confined to audit but to the contrary, the FBR has pre-conditioned the registration of transfer with the verification of tax challans by FBR Authorities. Further contended that there is no legal mandate with the FBR Authorities to verify the tax challans and no tax law binds the Withholding Authorities to get tax challans verified by FBR offices.

In this regard, the FTO refereed the complaints to the secretary Revenue Divisions for comments. The Commissioner, RTO, Quetta stated that the regional tax office had left no stone unturned in extending full-fledged facilitation and easing PSIDS making and tax payment process for general taxpayers.

However, a colossal amount of short deductions and non-deductions in taxes charged on transfer of property was revealed during audit. It was maintained by the concerned withholding authorities that they were not conversant with the FBR taxes and their staff was not efficient in this regard.

The assistance was sought by the Withholding Authorities to avert such malpractices. It was also contended that the verification of CPRs was pre-conditioned on persistent demand of the property registering authorities, as they were not well conversant with the proper application of rates, generation of PSIDs and authentication of tax challans.

While concluding the complaint the FTO observed that RTO Quetta specific administrative intervention in monitoring of withholding taxes on properties is alien to the rest of IR formations across the country. Notwithstanding the reasons put forwarded by RTO Quetta, an extra forum created without the FBR’s formal approval is apparently uncalled for.

Though FBR has the authority to pre-audit withholding taxes, yet FBR also has the responsibility to facilitate the taxpayers which can be conveniently ensured by use of technology. Ideally, the FBR should conduct, post audit on the basis of CPRs available in its database.

Accordingly, the FTO has directed FBR to install suitable operational software in the offices of all withholding agents responsible for transfer of properties, minimizing human discretion in application of valuation rates and calculation of taxes. The FTO in its findings has also emphasized FBR to evolve and enforce foolproof mechanism for timely post audit of CPRS across the country.

Copyright Business Recorder, 2023