KARACHI: The Federal Board of Revenue
(FBR) on Tuesday sought assistance of the central bank to obtain the details of
withholding tax from commercial banks, which are reluctant to provide
customer-wise details to the tax machinery.
FBR sources said in
this regard, the Large Taxpayers Unit (LTU) Karachi had sent a communication to
the State Bank of Pakistan (SBP) for providing records of withholding tax
deducted by the banks from non-filers on non-cash transactions.
The sources said it
was discovered during recent monitoring of Section 236P of Income Tax
Ordinance, 2001 that banks were providing only bulk information of tax deducted
and depositing the same to FBR accounts. The banks are required to
provide detailed information on monthly basis regarding the customer-wise
deduction of withholding tax under Section 236P, which was introduced by the
government through Finance Act, 2015 to increase the number of income tax
return filers.
The collection of
withholding tax was declining gradually throughout the current fiscal year. The
collection under this head was at Rs6.74 billion during July-January 2016/2017
as compared with Rs7.06 billion in the corresponding period of the last fiscal
year, showing a decline of 4.5 percent. The sources said most of the banks had
streamlined the transactions, and the FBR was receiving data online. However, a
few banks had not installed such a facility to share the details, said an
official at the LTU Karachi.
The government
introduced Section 236P through Finance Act, 2015, bounding banks to deduct
advance tax on transactions other than through cash. The deduction of
withholding tax from non-filers included demand draft, pay order, special
deposit receipt, cash deposit receipt, short term deposit receipt, call deposit
receipt, rupee travellers cheque or any other instrument of such nature.
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