The Federal Board of Revenue (FBR) has found that over 50 percent of the federal government-funded projects are not registered as "withholding agents" as required under the income tax law. The FBR has verified this information from the Director General of Large Taxpayer Units (LTUs), Medium Taxpayer Units (MTUs) and Regional Tax Offices (RTOs) in 2008.
An FBR document on withholding taxes issued on Thursday revealed that the Directorate General WHT has completed scrutiny of development projects of the government. A list of around 2300 federal govt. funded projects was sent to the field formations for verification.
Feedback of tax departments revealed that some 50 percent projects were not on the list of withholding agents of the respective RTOs. This showed serious non-compliance by the top government projects across the country. Most of the Project Directors of the PSDPs were not filing their withholding statements.
Overall deductions reported for the previous year under section 153 did not reconcile with the development outlays of the year. Expenditure on public sector development programme (PSDP) has different components in terms of civil works, operational expenditure, salary and wages and others.