The Federal Board of Revenue (FBR) has decided to issue a new procedure for Provincial Accountants-General to systematically deduct withholding tax on various payments made by provincial governments on salaries, supplies, contracts, etc, under Income Tax Ordinance 2001.
Sources told Business Recorder here on Saturday that the FBR has drafted the procedure on the Cash collection of withholding taxes by the Provincial Accountants General to improve withholding tax collection from provincial governments. The new procedure would streamline mechanism for deduction of withholding tax on salary, supplies and contracts by the Provincial Accountants General for accurate reporting to the FBR.
According to the proposed procedure, the subordinate offices of the Provincial Accountants General shall send monthly note to their Accountants General of the deductions/collection of income tax made by them. The Accountants General shall give a consolidated cheque to the AGPR, sub-offices Peshawar/Lahore, Karachi, Quetta or to Federal Tax Ombudsman (FTOs) at these stations. These cheques shall then be credited to the Federal Government through challans as cash payments. Thus the provincial Accountants General at these stations would have the district-wise break-up of collection included in the monthly cheque/challan.
Federal Tax Ombudsman (FTOs) at the DPCs/DPUs at these stations will, therefore, certify (in the enclosed format) to the RTOs having jurisdiction over the district of the monthly collection included in the cheque/challan and the concerned RTO will take credit accordingly.
Under the draft procedure, the concerned Federal Treasury Officer shall maintain permanent record of all such printouts. The procedure on credit for book adjustment has specified that the withholding taxes collected or deducted by the following authorities or their subordinate offices and credited to the Federal Government through book adjustment shall be reported by the respective income tax authorities: Sub-offices, AGPR, falling in territory of RTO would report to the RTO, Peshawar; Controller Air Force Accounts, Peshawar to RTO Peshawar; Sub-offices, AGPR, falling in territory of RTO, Abbottabad would report to the RTO Abbottabad.
Accountant General, Pakistan Revenues, Islamabad would report withholding tax deductions to the RTO Islamabad; Military Accountant General, falling in territory of RTO, Rawalpindi will report to the RTO Rawalpindi; Sub-offices, AGPR, falling in territory of RTO, Lahore would report to RTO-I, Lahore; Sub-offices, AGPR, falling in territory of RTO, Karachi would report to the RTO-II, Karachi; Controller Naval Accounts, Karachi would report to the RTO-II Karachi; Sub-offices AGPR, falling in territory of RTO, Hyderabad would report to the RTO Hyderabad, Sub offices AGPR, falling in territory of RTO, Sukkur would report to RTO, Sukkur; Sub-offices, AGPR, falling in territory of RTO, Quetta would report to the RTO Quetta; Sub offices. AGPR falling in territory of RTO, Multan would report to the RTO Multan; Sub-offices, AGPR, falling in territory of RTO, Faisalabad would report to the RTO. Faisalabad; Sub-offices, AGPR, falling in territory of RTO, Gujranwala would report to the RTO Gujranwala and collection/deduction of withholding tax made by the sub-offices, AGPR, falling in territory of RTO, Sialkot would report to the RTO, Sialkot.
The FBR has issued a separate procedure for the reconciliation of collection. In view of the procedure of reporting of collection, each RTO/LTU is to reconcile every month the collection reported in his Monthly Performance Report by providing certificates in the following manner: The certificate of reconciliation of receipts signed by the officer incharge of Statistical Branch and the District Treasury Officer concerned duly countersigned by AGPR/AGPR sub-office.