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Thursday March 28, 2024

FBR’s e-portal fails to facilitate

withholding statement’s filing

By Shahnawaz Akhter
October 14, 2015
KARACHI: The Federal Board of Revenue’s (FBR) electronic filing system has failed to help the apex tax authority in its efforts to identify new taxpayers as the software is yet to integrate a module to enable online submission of withholding statements from banks and others, official sources said on Tuesday.
FBR introduced the computerised Iris – a flower name symbolising wisdom – last year and faced severe criticism from all the stakeholders due to its performance. This year again, its performance becomes questionable as after a lapse of three months, the withholding module in IRIS has yet to be operational, thereby no proper record of withholding tax deduction is maintained.
The Section 236P, introduced to the Income Tax Ordinance, 2001 through the finance bill of 2015/16, requires a banking company to withhold tax on a banking transaction exceeding Rs50,000/day from non-filer of tax returns.
Officials at the Large Taxpayer Unit (LTU) Karachi confirmed that they had not received withholding statements from banks despite an extension in the date for filing of monthly withholding statement to 8 October.
A tax official said an impression has been created in the past three months that banks are reluctant to share data of withholding tax deducted from non-filers, “but the situation is entirely different as banks are unable to file statement due to problems on Iris.”
The official said the withholding agents complained about multiple issues, including handling of bulk information at the portal. Therefore, “Several requests to extend the filing deadline have been received,” an official at LTU Karachi said on condition not to be named.
Officials at LTU and Regional Tax Office (RTO) Karachi said commissioners of Inland Revenue received numerous applications for the adjournment of filing of withholding statement for July and August 2015.
“When the module is not ready then why filing of the withholding statement has been made mandatory,” questioned a tax official. Tax officials said a system is already in place and is providing withholding deduction information, which should be continued.
“Iris system should be launched as pilot to address its glitches,” another official said. The inserted section led to a confrontation between the government and traders. The finance minister and FBR are optimistic about identifying people having taxable income but not paying their due liability.
Tax officials said obtaining results through different rates and imposition of the new provision is only possible when the tax authorities receive withholding statements. Tax officials are facing various issues with regards to the Iris, which have been discussed with the FBR high-ups.
The local tax offices complained that the Federal Board of Revenue’s headquarters insists on continuation of the existing software instead of resolving the issues. The tax reform commission, in its interim report presented in May 2015, recommended that a chief executive officer (CEO) of PRAL (Pakistan Revenue Automation (Pvt) Ltd) should be urgently recruited through open/transparent process due to back to back failure on Iris.
“A high caliber CEO with IT background is sine qua non for the future of FBR,” the report said. It added that the CEO should be selected through open public advertisement based on his ability, aptitude, competence, IT background and past experience.
Karachi Tax Bar Association (KTBA), in its letter to the ChairmanFederal Board of Revenue’s on October 8, highlighted issues faced by withholding agents on the e-portal. The tax bar requested the authority to extend the last date for filing of withholding statement for another month.
President Muhammad Zubair at KTBA said the situation remains unchanged as tax practitioners and withholding agents are facing difficulties in filing withholding statement. Zubair hopes that FBR will extend the filing deadline and resolve the issues on the e-portal.