Karachi, November 16, 2025 — The Federal Board of Revenue (FBR) is moving toward strict enforcement of penal provisions against withholding agents who fail to provide complete information about individuals involved in major financial transactions.
The tax authority aims to strengthen documentation and identify potential taxpayers who remain outside the tax net.
Why Withholding Agents Are Under Scrutiny
According to FBR insiders, withholding agents—who collect or deduct income tax from buyers and sellers—must now ensure the complete submission of transaction details. This includes the identity and particulars of individuals involved in purchases, sales, or other taxable dealings.
Officials told PkRevenue that accurate and timely data is crucial for Pakistan’s tax-broadening initiative. Non-compliance will now trigger significant penalties.
Penalty Structure Under Income Tax Ordinance 2001
The following table breaks down penalties under Sections 165, 165A, 165B, and 165C for failure to submit required statements on time:
Penalties for Non-Submission of Statements
| Condition | Penalty Amount |
| Statement filed within 90 days AND tax already paid within due date | Rs 50,000 |
| Statement filed after 90 days OR tax not paid in due date | Rs 2,500 per day, minimum Rs 10,000 |
| If no tax was required to be collected/deducted during the period | Minimum Rs 10,000 |
What This Means for Businesses
Withholding agents must now take additional precautions:
Key Compliance Requirements
• Collect full details of buyers or sellers involved in taxable transactions.
• Submit statements under relevant IT Ordinance sections before due dates.
• Ensure deducted/collected tax is deposited on time.
Failure to meet these obligations may result in daily accumulating penalties, creating substantial financial exposure.
Why FBR Is Tightening Enforcement
The FBR believes that gaps in reporting by withholding agents are a major hurdle in identifying non-filers and documenting the economy. By enforcing penalties, the authority intends to:
• Expand the tax net
• Improve transparency
• Track large unreported transactions
• Increase revenue through compliance rather than rate hikes
Disclaimer: This news article is based on information obtained from publicly available sources and insights shared by relevant officials. It is intended for informational purposes only and should not be considered tax advice or a substitute for professional guidance. Readers are encouraged to consult qualified tax professionals or refer to the official.