FBR required to expedite WHT audit of NHA to recover billions of rupees
ISLAMABAD: In line with the order of the Federal Tax Ombudsman (FTO), the Federal Board of Revenue’s (FBR) Islamabad tax offices need to expedite audit and recovery of huge amount of Withholding Tax (WHT) due from the National Highway Authority (NHA).
Earlier, the FTO had directed the FBR to conduct a withholding audit of NHA for recovery of billions in tax years 2021 & 2022 due to less/ short-deduction of WHT on the auction of “toll collection rights” at Toll Plazas.
A public interest request was moved by Waheed Shahzad Butt Advocate against discriminatory application of WHT under section 236A of the Income Tax Ordinance, 2001 by NHA wherein after investigation it was found by the FTO that charge of WHT on auction of toll collection rights need comprehensive withholding audit for two tax years.
When contacted, Waheed Butt told this correspondence that the controversy revolves around the failure to collect a substantial WHT from the authority, amounting billions of rupees.
The WHT, as mandated by tax regulations, is a crucial source of revenue for the government and plays a pivotal role in funding various developmental projects and public services across Pakistan.
Apparently, tax offices of Islamabad seem to be not actively pursing recovery from the authority, he added. FTO order stated “complaint has been filed against discriminatory application of withholding taxes by NHA & FBR functionaries, in violation of provisions of sections 236A, 160, 161, 163 & 205, thus depriving the public exchequer from its due, without lawful authority. Surprisingly, NHA is deducting WHT at the rate of 5% while Punjab Highways are deducting it at the rate of 10%.
Timely deposit of WHT deduction into the Federal Treasury is yet another black hole, which merits a probe. NHA & Punjab Highways Department are withholding agents.
There appears a short deduction and the relevant FBR authorities entrusted with the monitoring jurisdiction needs to take cognisance of these short deductions in terms of sections 161 and 205 of the Income Tax Ordinance involving significant revenue.
Maladministration is established. FBR is directed to ensure that the CCIRs concerned conducts comprehensive withholding audit of NHA for the years 2021 & 2022 and accordingly proceed under the law for the recovery of short paid amount.
Copyright Business Recorder, 2023
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