Director-General, Withholding tax (DGW) has detected Rs 900 million tax evasion by Karachi Electric Supply Company (KESC), collected through electricity bills during September 2008 to January, 2009. Sources told Business Recorder on Wednesday that KESC had collected some Rs 900 million tax from electricity consumers during last five months and had not deposited in the exchequer.
They said that KESC withheld the said amount to acquire furnace oil aimed to overcome the shortage of electricity persisting for months across the metropolis and also to meet its running expenditures. They said that some Rs 655 million has been recovered from KESC in this connection and hoped that the rest amount would be retrieved by the next month.
Sources said that DGW contributes around 53 percent of total revenue collection, but has been facing hardships to monitor withholding tax, detected by withholding agents owing to inadequate infrastructure. They stressed the need of providing sufficient workforce to DGW, saying that withholding tax was an important tool not only to enhance revenue collection but also to broaden tax net and for documentation.
Sources said that DGW has moved a summary to the Federal Board of Revenue (FBR) for establishing six regional offices at Karachi, Islamabad, Lahore, Peshawar, Multan, and Rawalpindi to enhance the efficiency of the department.
They said that DGW collected Rs 337 million withholding tax during last six months as compared to Rs 30 million collection made in last corresponding period. Furthermore, they said that department has raised around Rs 1.2 billion demand after monitoring three cases pertaining to power, aviation and energy sectors. They said that department is striving to bridge the gap in the collection of capital value tax (CVT), which has declined around 70 percent in its collection because of decelerating stock market activities.
They lamented that out of total 17000 withholding agents, only 7000 agents were filers, providing huge losses to national exchequer. They also stressed the need of taking prompt measures to induct all enrolled agents in tax base, which would definitely play a vital role in achieving the revenue target, successfully.