The Central Board of Revenue (CBR) has withdrawn the condition of submitting National Tax Numbers (NTNs) or Computerised Identity Card Numbers (CNICs) in cases where agents have deducted 2 percent extra withholding tax from suppliers etc operating without NTNs or CNICs.
The decision was taken in a meeting here on Saturday to finalise the modalities for smooth implementation of the tax automation project from April 1, 2007. The Board approved the strategy to deal with persons under the new automation system where section 153 (8A) of the Income Tax Ordinance 2001 is applicable. The banks will accept withholding tax statements in cases where the agents have deducted 2 percent extra tax from suppliers having no NTNs or CNICs.
Meanwhile, the CBR has clarified the status of various taxpayers for submission of NTN or CNICs for payment of tax at banks. For deposit of tax by individual/AOP/ corporate taxpayers (limited companies) through single Challans, it would be mandatory to mention NTN or CNIC.
In the cases where tax deducted under various provisions of the Income Tax Ordinance, 2001 from the multiple taxpayers is deposited by the withholding agents, tax payment challan will be acceptable without CNIC or NTN provided further tax @ 2 percent, chargeable under 8(A) of Section 153 of income Tax Ordinance, 2001 is also deposited along with the challan.
In this connection, further tax @ 2 percent chargeable under the aforementioned statutory provision of law prevails over the administrative instructions. This will help in the documentation of the economy and also enable full implementation of the Collection Automation Project, that has been started by the CBR for solving various tax deposit/credit related problems of the tax paying community.
The CBR has further advised the prescribed persons, who are required to deduct tax under the law from the payments to their venders/suppliers/agents etc to collect their NTN and CNIC for incorporating the same in the tax payment challan as well as in the periodic withholding statements.
The Board on March 25, 2007 had said that tax deposit challan will not be accepted by State Bank of Pakistan/National Bank of Pakistan without mentioning of valid National Tax Number (NTN) or Computerised National Identity Card (CNIC) number from April 1. Subsequently, the CBR has received representations from various Withholding Agents intimating their difficulties to fully implement the system on account of non-availability of NTN or CNIC of a large number of their 'payees', the Board added.