All withholding agents: Commissioners must check records: FBR

With a view to increasing revenue collection, the Federal Board of Revenue on Thursday made it mandatory for the Chief Commissioners of LTUs and RTOs to check withholding tax records of all leading and well-documented withholding agents including private/public limited companies for recovery of billions of rupees.
Sources told Business Recorder here on Thursday that for the first time the FBR has drafted a withholding operational strategy as a key measure to surpass the budgetary target of Rs 1952 billion during 2011-12. The FBR has estimated collection of huge amount from enforcement/administrative measures and implementation of the withholding operational strategy for 2011-12 would also play a key role in amassing the quarterly revenue collection targets of the Board. It is expected that the FBR would be able to generate additional revenue in billions by timely implementation of the withholding operational strategy for 2011-12.
The most documented sectors are falling within the jurisdiction of the LTUs and the implementation of the national withholding strategy for 2011-12 would ensure that the big companies and government organisations/departments are properly deducting withholding tax and depositing the same in the national exchequer. The analysis of tax profiles through audit of the most documented companies would also help the tax department to recover due amount of withholding tax. For example, recently Large Taxpayer Unit Karachi had informed the FBR that the collection of withholding tax on cash withdrawal from banks has vast potential and FBR should issue instructions to the banks for proper deduction and deposit of the withholding tax on cash withdrawals, official said.
According to the withholding operational strategy (2011-12), the Directorate General Intelligence and Investigation Inland Revenue shall be responsible for the overall monitoring and co-ordination of withholding taxes. All inter-Regional Tax Offices disputes relating to the jurisdictional issues and other legal irritants shall be resolved by Policy Section of IR Wing FBR.
It said that as withholding taxes constitute the lifeline in our lax system therefore following timelines have to be met by all. The FBR has categorically warned the Chief Commissioners of Large Taxpayer Units and Regional Tax Office (RTOs) that any failure on this account shall be construed as gross inefficiency. The FBR has further directed the field formations to strictly follow the timelines given by the Board for monitoring and audit of withholding agents during 2011-12.
Under the timelines given by the Board, the Regional Withholding Units at the RTOs would be raised and made operative within one-week time. By October 8, 2011 charge assumption reports of all officers posted, as heads of RWUs must reach the office of Member (IR), FBR said.
In the next phase, the Monitoring and Audit Cells (MACs) of the RTOs shall be raised & operative within two weeks time and by October 15, 2011 officers in charge MACs should report to their respective RWUs. The comprehensive lists of withholding agents shall be prepared by WRUs/MACs and final dateline for this task is October 29, 2011.