Home » News » Finance » RCITs directed to ascertain withholding tax impact on cash withdrawals

RCITs directed to ascertain withholding tax impact on cash withdrawals

ISLAMABAD (November 11 2005): The Central Board of Revenue (CBR) has directed all the Regional Commissioners of Income Tax (RCITs) to compare cash withdrawals from banks in the first quarter (July-September) 2005-06 with the corresponding period last fiscal to ascertain impact of 0.1 percent withholding tax levied on above Rs 25,000 cash withdrawals.

Official sources told Business Recorder on Thursday that the Board has also asked the commissioners to submit total amount collected through cash withdrawals under section 231A of the Income Tax Ordinance 2001. The CBR is reluctant to use the figures reported by the income tax data processing centers, while field officers would directly collect information from banks in this regard.

The CBR has also decided to increase direct taxes from telecommunication and oil & gas sector in 2005-06. The Regional Commissioner of Income Tax, Northern Region, Islamabad, would conduct study on the level of activity and profitability in the telecom sector. Secondly, the projection of business activity made by the Oil and Gas Development Co (OGDC) would be examined to calculate estimated tax from the oil & gas sector.

The CBR has directed the RCITs to improve advance tax/withholding tax collection to improve tax-GDP ratio.

It has been decided to obtain early fixation of appeals at the Supreme Court. Income tax cases pending at the Sindh High Court would be pursued. The Income Tax Appellate Tribunal, Lahore, has 9,000 pending departmental appeals, which would be reviewed to dispose of pendency.

The CBR has also conveyed to the RCITs that despite increase in the number of returns for the tax year 2005, the number of concealment cases detected and penalty imposed is not encouraging and needs attention of field officers.

The Board has also expressed dissatisfaction over a number of desk-audits conducted by field officers. The income tax commissioners have been asked to monitor the performance of audit officers on monthly basis to ascertain the number of audits conducted by each officer.

The CBR has issued instructions to the CITs to compile a list of withholding agents operating in different cities developing a centralised registration system of these agents.

The list of withholding agents like government departments, development authorities, companies, etc would be compiled and nominated income tax officials would convene meetings for proper collection of withholding tax. The category of withholding agents would be prepared pertaining to quantum of tax deducted.

Leave a Reply