FBR directed to take action against non-compliant withholding agents

ISLAMABAD: Federal Tax Ombudsman Mushtaq Ahmad Sukhera has directed the FBR to initiate and finalise proceedings against non-compliant withholding agents. He issued the directives under Section 161 read with Section 205, where default is established in terms of Section 165 of the ordinance. He has further directed the FBR to register all the non-compliant withholding agents on the tax roll and ensure submission of withholding statements in terms of Section 165 of the ordinance. An own motion investigation was initiated to investigate the failure of the FBR to monitor the 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 the Income Tax Ordinance , 2001. The total number of withholding agents is 11,723 whereby shockingly 6,406 withholding agents are not on tax roll as reflected by the data provided by the FBR. It was found during the investigation that most of the withholding agents, who are on NTN, were non-filers of withholding tax statements that they are required to submit under Section 165 of the ordinance. The public exchequer has/had thus been losing huge legitimate tax, which the FBR ought to have collected, wherever applicable. The Federal Tax Ombudsman Own Motion decision states this to be sheer ineptness and inefficiency on the part of FBR, along with its field formations that ended into failure in developing a timely, proper and robust mechanism to monitor Advance Tax collections under Section 236C and 236K of the ordinance, which tantamount to maladministration. Therefore, the FBR has been directed to do the needful and report compliance within 60 days.