Tuesday May 24, 2022

Payment to Broadsheet: NAB’s mistake inflicts heavy loss to national kitty

January 29, 2021

ISLAMABAD: Broadsheet case has taken another turn as it has emerged that the national exchequer had to suffer loss of millions of rupees due to alleged mistake of the National Accountability Bureau (NAB) while paying damages on the order of Arbitration Court of London.

The NAB did not deduct 15 percent withholding tax while paying $28.7 million as damages in Broadsheet case. The Federal Board of Revenue (FBR) has sent a notice to pay Rs60.9 million.

According to reliable sources, a notice was sent to NAB to pay Rs60.9 million ($40.3m) to the FBR. The notice was sent to DG NAB Headquarters on behalf of International Tax Department of FBR under Section 152 of FBR Ordinance.

It was stated in the notice that it had come to the knowledge of tax department that NAB had paid $28.7 million damages to Broadsheet LLC. It was also stated in the notice that the NAB had to deduct 15 percent withholding tax and deposit to the national exchequer at the time of paying $28.7 million under the Income Tax Ordinance, but it was not followed.

Under the Income Tax Ordinance, the withholding agent has to pay this tax if the withholding agent does not deduct tax. It means that the NAB, as a withholding agent, will have to pay non-deducted tax amount. The FBR directed NAB to deposit Rs60.9 million with the national kitty.

Earlier, an Arbitration Court of London had imposed $20 million fine on NAB in Broadsheet case. However, the NAB had to pay extra $9 million under the head of mark-up due to non-payment on time. The court in London had withdrawn over $28 million partially in this regard by freezing accounts of Pakistan High Commission.