The Federal Board of Revenue (FBR) has considered withholding tax collection as one of the weakest areas which needs to be focused upon, pointing toward immediate audit of the withholding agents for generating additional revenue in the remaining period of 2010-2011.
Sources told Business Recorder here on Thursday that the FBR has directed all Chief Commissioners of Inland Revenue to ascertain reasons behind huge gap in withholding tax collection, ensuing deposit of the deducted amount by the concerned withholding tax agents during 2010-2011.
Sources said that the gaps in the withholding tax collection were discussed threadbare during the last Chief Commissioners Conference. Tax authorities have directed field formations the improve withholding tax collection and found reasons behind this huge gap between the potential and actual collection of withholding tax.
Some of the Chief Commiss-ioners pointed out that the withholding tax collection is the weakest area of tax collection, which needs to be focused. It was also pointed out that the growth in withholding tax collection has been reduced during 2010-2011 as compared to the past fiscals.
According to sources, the FBR has further directed the Chief Commissioners of Large Taxpayer Units and Regional Tax Offices (RTOs) to conduct analysis of the gaps in withholding taxes. It has been found that many areas like CNG stations, gas companies, utility companies, dividend income, contracts/supplies, imports/exports needs to be checked for accurate deduction and its subsequent deposit in the national exchequer. The withholding tax audit of banks and airlines has already been stared in the field formations.
During the Chief Commissioner Conference, it was also directed that the tax demands should only be created in those areas, which is recoverable. Only those tax demands should be raised against the taxpayers, which should remain sustainable at the level of judicial fora. There is no relevance of such tax demands, which could not be recoverable.
On the issue of e filing, some of the Chief Commissi-oners opined that the people particularly individuals are reluctant to utilise the e-filing system for submission of returns. In certain cases, people are not well trained to use the e-filing system. It has been decided in the conference to educate the taxpayers on the e-filing system for better understanding of the basic system of electronic filing of returns, sources added.