KARACHI: The Federal Board of Revenue is mulling a new online feature from next fiscal year to help taxpayers view their taxes withheld to facilitate refunds settlement and adjustments, sources...
KARACHI: The Federal Board of Revenue (FBR) is mulling a new online feature from next fiscal year to help taxpayers view their taxes withheld to facilitate refunds settlement and adjustments, sources said on Friday.
The sources said the FBR planned to introduce a system for verification of tax withheld and adjustment against total liability to ensure transparency and encourage documentation. Presently, a taxpayer is unable to verify his amount of withholding tax on the FBR’s portal, which results in hassle related to adjustment and refund claims, they said.
The sources said the FBR might introduce the system during the next fiscal year. Guidelines would be issued for the withholding agents in this regard to comply with the laws to digitally share details of taxpayers whose tax is withheld. The information of tax withheld would be given to taxpayers on their mobile phones under the new system. Further, cash payment receipt would be generated for each transaction, they said.
The withholding income tax is major contributor in the total revenue collection. The collection of withholding under most of the provisions is adjustable.
The sources said presently if a taxpayer makes transactions on which tax deducted, he is unable to adjust due to verification issue. Though withholding agent deposits the amount there are no details of people whose cash is withhold or the case is never deposited.
When refund is claimed, the FBR online system asks details of challan on which withholding tax was deducted. Since there is no record on the online system the taxpayer fails to avail the claim. However, records of tax deducted by leading corporate entities and documented sectors are shared with the FBR, which results in easy verification.
The sources said the present loophole is causing huge losses to national exchequer and shattering confidence of taxpayers whose tax is withheld.
The withholding tax was introduced to encourage individuals having taxable income to pay their liability and make declaration. The FBR has lower tax rates for compliant taxpayers and higher rate of tax for individuals not on the tax roll.
However, hassles in adjustment of withholding tax and claiming of refunds are discouraging broadening of tax base.
The FBR recently launched direct transfer of income tax refunds to the taxpayers’ bank account. However, the tax authorities made it mandatory for people to provide their bank account details in order to ensure transparency.