KARACHI: Mian Nasser Hyatt Maggo, President of the Federation of Pakistan Chambers of Commerce and Industry strongly demanded FBR chairman to withdraw notices issued by the officials under Section 161(1A) of Income Tax Ordinance 2001 read with rule 44(4) of income tax rules 2002.
President FPCCI informed that a compliant tax payer is obliged to deduct tax at source under various sections of the Income tax ordinance 2001 and deposit in the government treasury in the prescribed manner with respect to purchase and payments and expenses made by the tax payer.
While Majority of the tax payers is receiving monitoring notices assumes that the tax payer has not deducted any tax under all sections and has not deposited any amount in the government exchequer. The tax payer is required to submit all details against this notice, even though the tax payer has already filed the withholding tax returns as required by the law.
He further added that there are many suppliers who receive exemption certificates from FBR and the customer is not required to deduct tax at time of payment. All commercial importers pay withholding tax at import stage and subsequently no tax these suppliers are to be withheld by the customer.
All textiles related products come under the 1% withholding regime but notices are being issued to majority of textile companies to prove that they have deducted 6.5% on all their purchases which is 6.5 times of required deduction.
He further said that a standard format of notice is issued to all these tax payers mentioning the highest rate of withholding tax which is prescribed under the mentioned sections.
Mian Nasser Hyatt Maggo said that the amount deposited by the compliant tax payer should be considered before the notice is issued of the assumed amount. He demanded FBR to withdraw all such notices as it discourage broadening of tax base.
Copyright Business Recorder, 2021
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