Islamabad: The Federal Tax Ombudsman (FTO) has suggested that the Federal Board of Revenue (FBR) take a closer look at how banks handle taxes and work to improve the system for collecting withholding taxes more efficiently.
According to the details, the FTO advises the FBR to review the regulations and monitoring practices regarding how banks handle withholding taxes. They believe that the current process, which is complicated and time-consuming, needs to be replaced with a more streamlined and effective method. The FTO suggests that banks maintain detailed records of withholding taxes, which the FBR can access regularly. However, this would require changes to existing laws. While banks generally handle withholding taxes well, the lack of clear legislation makes it difficult for the FBR to access these records.
Ensuring strict monitoring of these tax accounts is vital for detecting tax evasion. This is particularly important for various types of income, such as profits on debt, salaries, payments to non-residents, payments for goods and services, and income from property.
The FTO emphasises the importance of banks consistently collecting and promptly depositing withheld taxes into the government treasury. This will help maintain a fair and effective tax system.
