WHT collection: FBR asks Sindh Finance Department not to retain two percent service charges

The Federal Board of Revenue has conveyed to the Finance Department, Government of Sindh not to retain 2 percent service charges on total collection of withholding tax on behalf of the federal government. The FBR on Tuesday sent a letter to the Finance Department, Government of Sindh to this effect. According to the FBR, no deduction of service charges from the tax withheld or collected by any person can be made under section 168(6) of the Income Tax Ordinance, 2001.
The section 168 credit for tax collected or deducted sub-section 6 says: "Notwithstanding anything contained in any other law or any rules for the time being in force, no amount shall be deducted on account of service charges from the tax withheld or collected by any person under the provisions of this Ordinance," it added. In view of the above legal position, the FBR has requested the Finance Department Sindh to withdraw the concerned letter immediately and intimate field formations not to retain any service charges, the FBR added.