FBR asked to safeguard low-paid employees against excessive deductions

LAHORE : A temporary employee of Pakistan Broadcasting Corporation had filed a complaint with the FTO against deduction of income tax, 17.5pc, being made on the gross amount without any basic exemption like the one available to the salaried government servants (annual salary less than Rs4 lakh per year is exempt from tax salaried class).

According to a press release issue by FTO, while responding to FTO, FBR IR-Policy wing had informed the FTO that the daily wagers do not fall in the category of salaried persons thus cannot be categorised as exempt employees. The rate of tax for such contract-services employees has to be deducted u/s 153(1) (b) of the Ordinance that is 10pc and for non-filers it is 20pc. In his recommendations, FTO noted that Regular/Ad hoc/Temporary/Daily Wages, all are the different shades & forms of employment and law does not create any distinction among all the above forms, and daily wagers cannot be excluded from the ambit of employment.

In the findings, he held that FBR's treatment of the instant case u/s 153(1) (b) is against the dictates of law and excessive tax deductions from the pay/wages of a low paid temporary employee of PBC tantamount to maladministration in terms of FTO Ordinance, 2000. In view of the above he recommend to FBR chairman to ensure that low paid employees of PBC and other such organisations are not burdened with excessive tax deductions at withholding stage. While taxpayers facilitation constitutes the core function of FBR, its implementation on ground should also be visible.

He directed the RTO concerned to process the instant case on priority and under relevant legal provisions, so as to save the complainant from grave hardship he is suffering since 2017. He desired that FBR should issue necessary clarification for all and sundry so as to safeguard the low paid employees against excessive deductions.