Tax offices to serve notices on non-filer firms

KARACHI: Tax offices are issuing notices to non-compliant companies registered with Securities and Exchange Commission of Pakistan (SECP) to file their income tax returns for tax year 2018 and onwards to avoid penal action, a top official of the Federal Board of Revenue (FBR) said on Monday.

“Under Income Tax Ordinance, 2001 all the companies registered with the SECP are required to file annual income tax returns and wealth statement,” Dr Aftab Imam, Chief Commissioner Inland Revenue (CCIR) of Corporate Regional Tax Office (CRTO) Karachi said.

He was talking to media at the launching of ‘Skill Development Program on System Audit of Withholding Agents’. The CCIR said his office had identified non-compliant corporate entities through data obtained from the SECP.

He said that as per the tax law, every registered company was required to file return irrespective of profit or loss during a year. Reportedly, the number of registered companies with SECP has increased to 102,000 and less than 50 percent of registered companies are filing their income tax returns.

Elaborating the skill development programme, he said it was initiated on the directive of FBR Chairman Syed Shabbar Zaidi. The programme has been conducted by Director General Withholding Taxes Faheem-ul-Haq.

The skill development programme has been initiated from the CRTO Karachi. “This initiative comprises the skill development of officers of system audit of withholding agents to monitor and improve the collection and deposition of withholding tax,” the CCIR said.

It should be noted that the total collection of withholding taxes declined by 5.3 percent in fiscal year 2018/2019. The collection of withholding tax was at Rs960.71 billion during 2018/2019 as compared with Rs1,014 billion in the preceding fiscal year.

The CCIR said the field officers of all field formations of Sindh and Balochistan ie Corporate RTO Karachi, Large Taxpayers’ Unit I and II, RTO Hyderabad, Quetta and Sukkur were being trained into the system audit of withholding agents by a renowned chartered accountant.

He further said the CRTO was also facilitating taxpayers to understand the deduction/collection and deposit of withholding taxes in order to avoid penal actions. Dr Aftab Imam also said that following the changes brought in through Finance Act, 2019 the withholding agents need to understand their responsibilities.

He said through introduction of 10th Schedule to the Income Tax Ordinance, 2001 the applicable rates on persons not appearing on Active Taxpayers List (ATL) had been enhanced by 100 percent on various types of transactions.

Talking about revenue collection performance of the CRTO Karachi, the CCIR said the office collected over Rs12.4 billion in the first month of current fiscal year as compared with Rs10 billion in July 2018, showing 24 percent growth.