NLC, FWO, DHAs, others: big withholding agents not filing statements regularly

The Sales Tax Enforcement Plan (2012) framed by the Federal Board of Revenue has disclosed that some of the large withholding agents such as National Logistic Cell (NLC), Frontier Works Organisation (FWO), Defence Housing and Development Authorities, National Highway Authority (NHA), Railways and Military Accountant General were not regularly filing sales tax returns and withholding tax statements for income and sales taxes withheld from payments made to the vendors.
Sources told Business Recorder here on Thursday that the FBR will allocate Withholding Tax Identification Numbers to all withholding agents by January 31, 2012 and sales tax withholding agents would also be allocated numbers by the given deadline.
The FBR plan (2012) has focused on the filing of sales tax returns pertaining to withheld sales tax by different withholding agents. According to the sales tax registration plan (2012), various persons such as Federal and Provincial Governments and their attached departments, Large Tax Payer Units (LTUs) taxpayers and certain other categories are required to withhold Sales Tax also. Here again, the position is disappointing as out of around 1000 persons holding free tax numbers (FTNs), only 34 are e-enrolled for filing statements.
The FBR plan stated that there is huge default in filing of annual as well as monthly statements. Out of 27,282 withholding agents who actually filed statements for tax year 2011, 8215 defaulted in filing all the four quarterly statement. Some of the large Withholding Agents such as NLC, FWO, Defence Housing and Development Authorities, NHA, Railways, Capital Development Authority (CDA) and Military Accountant General have not been filing the ST Returns and Withholding Tax Statements for Income Tax and Sales Tax withheld from payments made by them to the vendors. Out of 900 registered persons of LTU Karachi, 204 registered persons did not intimate about sales tax withheld by them. Likewise, 129 of 360 registered persons of LTU Lahore behaved on the similar lines while position of LTU, Islamabad is also not different, the FBR analysis said.
The FBR has proposed an action plan for enforcing Sales Tax Withholding Statements:
1. Identification of persons liable to file statements U/S 165, unit wise, by PRAL by January 10, 2012.
2. Determining the number of persons actually filing statements U/s 165 - unit wise by PRAL by January 15, 2012 and identification of defaulter.
3. Pakistan Revenue Automation limited (PRAL) to convey number of defaulters to the respective Chief Commissioner under intimation to Board within 07 days after the last date of submission of statements unit-wise each month.
4. Identification of new persons liable to file withholding tax statements by RTOs/LTUs on periodic basis including diplomatic missions particularly by RTO, Islamabad. They may be requested to file Withholding Tax Statement at least in respect of payments of rent and deduction of tax thereon without disclosing identification of property for security reasons.
5. Introduction of a scheme and allotment of Withholding Tax Identification numbers to all withholding agents across the board by January 31, 2012. Similar scheme will be implemented for Sales Tax Withholding Agents as some of the prescribed persons will be common.
6. Issuance of notices to defaulters with 60 days of their enlistment.
7. Enforcement of Statements within 90 days, the FBR plan (2102) added.