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ISLAMABAD: On the directives of the Federal Tax Ombudsman, the Federal Board Revenue (FBR) has issued notices to the 3,574 unregistered withholding agents and taken action against housing societies for non-filing of withholding tax statements for 2019-20.

The FBR has submitted a compliance report to the FTO in this regard.

The FBR has reported to the Federal Tax Ombudsman that action has been initiated in the housing societies/authorities non-filing of withholding tax statement cases, as per direction of the Federal Tax Ombudsman by issuing notices to non-filers and defaulters for the tax year 2019-2020.

The FBR has informed the FTO that a total number of 3,574 notices have also been issued to unregistered withholding agents.

The Federal Tax Ombudsman had directed to IR, LTOs, MTOs, CTOs and RTOs to register all the non-compliant withholding agents on tax roll and to ensure submission of withholding statements in terms of Section 165 of the Income Tax Ordinance.

An Own Motion notice was taken by the Federal Tax Ombudsman against failure of the concerned authorities to monitor advance tax to be collected at the time of sale, purchase or transfer/registration of immovable properties in terms of sections 236C and 236K of Income Tax Ordinance 2001.

The report submitted by the FBR confirmed that there was a total number of 11,723 agents in this category, out of these only 5,317 were on tax role, while 6,406 withholding agents for collecting advance tax at the time of sale, purchase and transfer of immovable property were not on tax role.

The Federal Tax Ombudsman observed that most of the withholding agents who were on NTN, were even non-filers of withholding statements, which they were required to submit under Section 165 of the Ordinance.

This indicated that the FBR and its field formations were totally indolent in procuring compliance of Section 236C and 236K of the Ordinance.

The field formation appeared to be content with just whatever is being collected and deposited in the government kitty by a few of the conscientious withholding agents.

It was shocking to know that some of the officers were even found oblivious of insertion of the above provisions of law, in the Ordinance.

The public exchequer had thus been losing huge legitimate tax, which the FBR ought to have collected under Section 236C and 23K of the Ordinance, wherever applicable.

The Federal Tax Ombudsman in his findings concluded that inefficiency, incompetence and negligence were found on part of the FBR.

The FTO office urged that the FBR must also direct the chief commissioner-IR, LTOs, MTOs, CTOs and RTOs to initiate and finalise the proceedings against non-complaint withholding agents under Section 205 where default is established in terms of Section 165 of the Ordinance.

The FTO advised the FBR to establish a proper monitoring mechanism regarding timely deposit of advance taxes under Sections 236C and 236K of the Ordinance.

Copyright Business Recorder, 2021

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