Non-filing of WHT statement: FBR tells FTO action being taken against housing societies

ISLAMABAD: The Federal Board of Revenue (FBR) has reported to the Federal Tax Ombudsman (FTO) that action has been initiated against the housing societies for non-filing of withholding tax statement cases.

As per the direction of the FTO, notices have been issued to non-filers and defaulters for the tax year 2019-2020. It has been reported that a total number of 3,574 notices have been issued to unregistered withholding agents.

The FTO had directed the IR, LTOs, MTOs, CTOs and RTOs to register all non-compliant withholding agents on tax roll and ensure submission of withholding statements in terms of Section 165 of the Income Tax Ordinance.

An own motion notice was taken by the Federal Tax Ombudsman against failure of the authorities concerned to monitor 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 Income Tax Ordinance 2001. The report submitted by the FBR confirmed that there was a total number of 11,723 agents in this category, out of them only 5,317 were on tax roll, while 6,406 withholding agents for collecting advance tax at the time of sale, purchase, and transfer of immovable property were not on tax roll.

The FTO observed that most of the withholding agents, who were on the NTN, were even non-filers of withholding statements, which they were required to submit under Section 165 of the Ordinance. This indicated that the FBR and its field formations were totally indolent in procuring compliance of Section 236C and 236K of the Ordinance. The field formation appeared to be content with just whatever is being collected and deposited in the government kitty by a few of the conscientious withholding agents. It was shocking to know that some of the officers were even found oblivious to insertion of the above provisions of law in the ordinance. The public exchequer had thus been losing huge legitimate tax, which the FBR ought to have collected under Section 236C and 23K of the Ordinance, wherever applicable.

The FTO, in his findings, concluded that inefficiency, incompetence and negligence were found on the part of the FBR.

The FTO office urged that FBR must also direct the chief commissioner IR, LTOs, MTOs, CTOs and RTOs to initiate and finalise the proceedings against non-complaint withholding agents under Section 205 where default is established in terms of Section 165 of the Ordinance. The FTO advised FBR to establish a proper monitoring mechanism regarding timely deposit of advance taxes under 0Sections 236C and 236K of the Ordinance.