Public Sector Enterprises (PSEs) are acting illegally by not deducting WHT from the fees paid to directors of the boards as well as attending committee meetings, which is against the IT Ordinance 2001, according to Transparency International Pakistan.
In a letter sent to Federal Board of Revenue Chairman Tariq Bajwa on November 26, Advisor, TI-Pakistan, Syed Adil Gilani, has cited Pak Oman Investment Company, Sui Southern Gas Company Ltd, Sui Northern Gas Pipelines Limited, and several other companies who have reportedly not deducted WHT since last ten years or so, causing loss to the exchequer which may run into billions of rupees.
This act of the Board of Directors of such PSEs is defined as corruption and corrupt practices in the National Accountability Ordinance, 1999, the letter says.
Section 9 (a)(vi) and 10 (a) of the National Accountability Ordinance, 1999 [as amended by National Accountability Bureau (Amendment) Ordinance, 2002] quoted below are punishable for rigorous imprisonment which may extend up to 14 years.
Corruption and corrupt practices: 9 (a) A holder of a public office, or any other person, is said to commit or to have committed the offence of corruption and corrupt practices-(vi) 2[if he misuses his authority so as to gain any benefit or favour for himself or any other person, or 3[renders or attempts to render] 4[or wilfully fails to exercise his authority to prevent the grant, or rendition of any undue benefit or favour which he could have prevented by exercising his authority].
Adil Gilani has requested the FBR Chairman to look into the matter and get the accounts of all PSEs checked for non-deduction of WHT from the fees paid to the respective directors. In case of violation of law, action may be taken to re-characterise the income, and recover the WHT from all the directors of such companies for the past years, and also penalise PSEs as per provisions of IT Ordinance 2001, he said.
Copies of the letter have been forwarded for the information and action under their mandate to: Secretary to Prime Minister, Islamabad, Senator Ishaq Dar, Minister of Finance, with request to take immediate action, Chairman, NAB, Islamabad, this may be act of undue favour under NAO 1999, Article 9(a) (vi), Federal Tax Ombudsman, Islamabad, and Registrar, Supreme Court of Pakistan, Islamabad.
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