A system error in the Federal Board of Revenue (FBR) online system is displaying the status of government departments/organizations, which are holding Free Tax Numbers (FTNs) as inactive.
The list of the FTN holders is available on the FBR website showing the names of the government organization and the FTN number allocated to them.
Sources told ProPakistani that the federal government and the federal government departments, not making any income, are not liable to file their annual income tax returns. The federal government is also not required to file an income tax return, the sources added.
The FBR has allocated Free Tax Numbers (FTNs) to all government departments for the purpose of deduction of withholding taxes being withholding agents. The tax liability of the FTN holders is to deduct and deposit the withholding taxes as they are not doing any kind of business or earning profits.
Mostly, the FTNs are legally required to file withholding statements of income tax and sales tax electrically, but they are not filing their withholding statements.
The holders of the FTNs are not liable to file returns and it is a system flaw that the FBR is showing FTNs as inactive. When such government departments are allocated FTNs, then there is no need to give them the status of inactive or active.
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