The FBR has recently been sending its inspectors to private houses in Islamabad – and possibly other cities. They are serving threatening notices to residents of rented houses and asking them to provide personal and rent-related information on a pro forma. This is being done after the tax law was amended, authorising tenants to deduct withholding tax from the rent (if the rent is more than Rs125,000 per month). Previously, only companies could undertake such activity. However, companies have trained accountants so it was not a problem.
On the other hand, most tenants are not trained accountants or knowledgeable in tax laws or competent to deduct the withholding tax from the rent and deposit it in national exchequer (as it also requires a good understanding of the FBR’s software). The finance minister must review the impracticality and implementation of this law.
P S Ahmad
Islamabad
