Federal Tax Ombudsman has directed the Federal Board of Revenue (FBR) to facilitate taxpayers and withholding agents by evolving a transparent IT solution.
The complaint had been filed on account of hardships caused by the process of verifying tax challans in terms of withholding tax on the transfer of property. The complainant stated that they have to undergo a lengthy process for getting PSIDs and making a deposit in a bank and then obtaining challans and conveying it to the FBR office for getting it endorsed and verified.
The property registering authorities had been compelled by the FBR authorities not to entertain the registration of the transfer without getting the tax challans verified from the FBR Office at Quetta.
Further added that the FBR has delegated powers to withhold authorities and they are confined to audit but to the contrary, the FBR has pre-conditioned the registration of transfer with the verification of tax challans by FBR Authorities. There is no legal mandate for the FBR authorities to verify the tax challans and no tax law binds the withholding authorities to get tax challans verified by FBR offices.
In this regard, FTO referred the complaints to the secretary of Revenue Divisions for comments. The Commissioner, RTO, Quetta stated that the regional tax office had left no stone unturned in extending full-fledged facilitation and easing PSIDS making and tax payment process for general taxpayers.
However, a colossal amount of short deductions and non-deductions in taxes charged on the transfer of property was revealed during the audit. It was maintained by the concerned withholding authorities that they were not conversant with the FBR taxes and their staff was not efficient in this regard.
Assistance was sought by the withholding authorities to avert such malpractices. It was also contended that the verification of CPRs was pre-conditioned on persistent demand of the property registering authorities, as they were not well conversant with the proper application of rates, generation of PSIDs, and authentication of tax challans.
While concluding the complaint FTO observed that RTO Quetta’s specific administrative intervention in monitoring withholding taxes on properties is alien to the rest of IR formations across the country. Notwithstanding the reasons put forward by RTO Quetta, an extra forum created without FBR’s formal approval is apparently uncalled for.
Though FBR has the authority to pre-audit withholding taxes, the authority also has the responsibility to facilitate the taxpayers which can be conveniently ensured by the use of technology. Ideally, the FBR should conduct a post-audit on the basis of CPRs available in its database.
Accordingly, FTO has directed FBR to install suitable operational software in the offices of all withholding agents responsible for the transfer of properties, minimizing human discretion in the application of valuation rates and calculation of taxes.
FTO in its findings has also emphasized FBR to evolve and enforce foolproof mechanisms for timely post-audit of CPRS across the country.
That in this line of property cases the registration authorities have no knowledge that 236c applicable on sales and 236 k applicable on purchaser and rates kindly issue necessary directions to concerned as tax payers facing problems at the time of getting credit of such wrong deductions