It is difficult to ascertain the exact number of withholding agents operating in Pakistan, as the Federal Board of Revenue (FBR) has contradictory numbers reported in the national tax conference and those specified in the standing operating procedure (SOP) on withholding taxes.
Sources told Business Recorder on Wednesday that the numbers of withholding agents specified in the national tax conference are entirely different from the numbers worked out in the (SOP), which is an authentic document on withholding taxes. There is a difference of nearly 13,927 withholding agents in view of numbers specified in the national tax conference vis-à-vis the SOP.
The FBR should do reconciliation of data to ascertain the actual number of withholding agents. If the numbers reported in national tax conference are accurate as well as latest, then the FBR must amend the SOP to update the numbers to avoid confusion.
It seemed that the SOP has mentioned the old numbers of agents, which needs to be corrected for the field formations. Director General WHT informed the last conference that there are approximately 38,000 withholding agents out of which 23,233 are enrolled on e-portal whereas 6,776 are non-filers, he added.
Sources said that if the numbers of withholding agents enrolled on e-portal are combined with the non-filers, the total number comes to 30,009. The question arises where are the remaining 7991 withholding agents?
The DG WHT also informed the conference that there non-filing of statements by the withholding agents is due to lack of enforcement. The FBR has issued instructions to the field formations to ensure enforcement and compliance by the non-filers, DG WHT added.
On the other hand, DG WHT has given an entirely different story in the SOP on withholding taxes. According to the SOP, field offices have reported that there are 24,073 withholding agents including 23,062 within the jurisdiction of Regional Tax Offices and 1,011 agents are registered with the Large Taxpayer Units.
The comparison of data presented before the national tax conference and that specified in the SOP showed a difference of around 13927 withholding agents. The SOP has said that the number of 24,073 withholding agents needs to be reviewed for being on the lower side. For example, around 11,000 companies are the Returns filers as against the following different types of companies (nearly 51,123) actually registered with the Securities and Exchange Commission of Pakistan (SECP).
Ordinarily, the number of agents should not be less than the number of such companies except the dormant ones. Agents like government offices, development projects, District Governments and AOPs etc created under law are yet to be added to the list, if already not done.
The process of enlistment of all withholding tax agents is in hand. The officers should find out and enlist the agents falling in their respective jurisdictions in respect of each ad every section. Consequently, the overall number is expected to increase substantially in each RTO.
This is the basic work and needs to be completed prior to undertaking monitoring activities, the SOP added. When contacted, a senior official said that there are around 37,000 to 38,000 withholding agents. However, it has to be seen how many are regularly filing statements and how many are compliant taxpayers and how many are actual non-filers of statements.
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