WHT collection in July-June fiscal year 2012: huge gap between tax demand and recovery unearthed

The Federal Board of Revenue has unearthed a huge gap of around Rs 8.793 billion between the withholding tax demand of Rs 28.711 billion and actual recovery of mere Rs 19.917 billion during July-June (2011-12). In this regard, the FBR has issued instructions to the Chief Commissioners of Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) here on Monday.
According to FBR instructions, the monitoring and management of withholding taxes has become a central activity for the field formations based on the fact that more than 90 percent of the budget of Regional Tax Offices is met out of withholding taxes. The contribution of withholding taxes in the overall achievement of the budgetary target for financial year 2011-12 remained at 59.8 percent.
Keeping in view the lion''s share in the budgetary target, Directorate General Withholding Taxes wants to draw attention of the authorities towards the importance of desk and field audit of the withholding agents falling in the jurisdiction of LTUs/RTOs. It includes the regular visits to the withholding agents, constant evaluation of withholding statement, monitoring the upward and downward trends in withholding collection and exploring untapped sources of withholding taxes. Monitoring on this pattern has yielded tremendous results in the immediate previous financial year wherein an amount of Rs 28.12 billion was generated under section 161 and section 205 of the Income Tax Ordinance 2001 and sizeable amount of Rs 19.918 billion was collected.
The effective performance by the each RTO/LTU during 2011-2012 is evident from the fact that the LTU, Islamabad has completed 46 audits of withholding tax agents, withholding tax demand of Rs 1796.094 billion created, recovery upto June 30, 2012 Rs 466.264 billion and balance collectable amount of withholding tax stood at Rs 1329.83 billion; LTU Karachi, number 136, Rs 6119.033 billion (demand created), Rs 6072.631 billion (recovery), Rs 46.402 billion (balance); LTU Lahore, number 340, Rs 3800.196 billion (demand created), Rs 2671.203 billion (recovery), Rs 1128.993 billion (balance); RTO Abbottabad, number 121, Rs 170.719 billion (demand created), Rs 43.543 billion (recovery), Rs 127.176 (balance); RTO Bahawalpur, number 119, Rs 200.72 billion(demand created), Rs 118.624 billion (recovery), Rs 82.096 billion(balance); RTO, Faisalabad, number 465, Rs 549.19 billion (demand created), Rs 468.978 billion (recovery), Rs 80.212 billion (balance); RTO, Gujranwala, number 300, Rs 831.468 billion (demand created), Rs 132.921 billion (recovery), Rs 698.547 billion (balance); RTO, Hyderabad, number 399, 1320.602 billion(demand created), Rs 501.836 billion (recovery), Rs 818.766 billion (balance); RTO, Islamabad, number 432, Rs 305.409 billion (demand created), Rs 53.858 billion (recovery), Rs 251.551 billion(balance); RTO-I, Karachi, number 792, Rs 445.27 billion (demand created), Rs 34.589 billion (recovery), Rs 410.681 billion (balance); RTO-II, Karachi, number 2116, Rs 6080 billion(demand created), Rs 5891 billion (recovery), Rs 189 billion (balance); RTO-III Karachi, number 263, Rs 1041.278 billion (demand created), Rs 744.641 billion(recovery), Rs 296.637 billion (balance), RTO-I, Lahore, number 414, Rs 3314.608 billion(demand created), Rs 1343.947 billion (recovery), Rs 1970.661 billion(balance); RTO-II, Lahore, number 438, Rs 677.538 billion (demand created), Rs 359.153 billion (recovery), Rs 318.385 billion (balance); RTO, Multan, number 238, Rs 734.541 billion (demand created), Rs 539.025 billion(recovery), Rs 195.516 billion (balance); RTO, Peshawar, number 122, Rs 641.053 billion(demand created), Rs 50.456 billion (recovery), Rs 590.597 billion (balance) ; RTO, Quetta, number 44, Rs 74.782 billion (demand created), Rs 33.813 billion(recovery), Rs 40.969 billion(balance); RTO, Rawalpindi, number 1529. Rs 340.327 billion, Rs 233.843 billion, Rs 106.484 billion; RTO, Sargodha, number 81, Rs 54.763 billion (demand created), Rs 35.443 billion (recovery), Rs 19.32 billion (balance); RTO, Sialkot, number 269, Rs 121.6 billion(demand created), Rs 72.016 billion(recovery) , Rs 49.584 billion(balance); RTO, Sukkur, number 68, Rs 92.44 billion (demand created), Rs 50.075 billion (recovery), Rs 42.365 billion (balance) and total number of withholding audit completed was 8732, demand created Rs 28711.631 billion, recovery up to June 30, 2012 Rs 19917.859 billion and balance amount collectable stood at Rs 8793.772 billion.
As per Federal Board of Revenue Year Book 2011-12, the withholding taxes regime has shown 18 percent growth which can further be increased in the current financial year by repeating the same performance and upholding the tradition of hard work and effective monitoring. The previous year''s performance gives us great impetus to further raise the standards.
Therefore, RTOs have been requested to forward desk and field audit plan of the withholding agents of their respective RTO/LTU by October 23, 2012. The RTOs have been requested to make all out efforts to liquidate the balance demand of Rs 8.793 billion for the previous year, the FBR instructions added.