Withholding agents have been relaxed and they are now required filing statements biannually, according to new amendments introduced by the government of Pakistan.
In a bid to enhance the ease of doing business and reduce administrative burdens, the Pakistani government has introduced significant amendments to the reporting requirements for withholding agents through the Finance Supplementary (Second Amendment) Bill of 2019. The bill, presented in the National Assembly on Wednesday, specifically targets the frequency of filing withholding statements by prescribing persons or withholding agents, aiming to streamline processes and create a more business-friendly environment.
The key amendment centers around Section 165 of the Income Tax Ordinance of 2001, which previously mandated withholding agents to submit monthly statements to the Federal Board of Revenue (FBR). With the proposed changes, withholding agents are now required to furnish statements biannually, offering a reprieve from the monthly reporting obligation.
The Finance Supplementary Bill outlines the details that withholding agents must provide in the biannual statements. This includes comprehensive information such as the name, Computerized National Identity Card (CNIC) number, National Tax Number (NTN), and address of each person from whom tax has been collected or to whom payments have been made with tax deductions. Additionally, withholding agents must disclose the total amount of payments made and the total amount of tax collected or deducted during each half-year period. The bill also empowers the Commissioner Inland Revenue to direct withholding agents to provide details for specific periods if deemed necessary.
The prescribed schedule for filing these statements has been outlined in the latest finance bill. According to the provisions, withholding agents must submit statements:
By July 31 for the half-year ending on June 30.
By January 31 for the half-year ending on December 31.
These amendments are expected to simplify the reporting process for withholding agents, providing them with more flexibility and reducing the administrative burden associated with monthly submissions. The move aligns with the government’s broader objective of promoting a business-friendly environment, fostering economic growth, and encouraging investment.
The Finance Supplementary (Second Amendment) Bill of 2019 gives the Commissioner Inland Revenue the authority to issue written notices directing withholding agents to furnish statements for specific periods. This discretionary power allows the commissioner to tailor reporting requirements to the needs of the tax administration, ensuring effective oversight without imposing unnecessary burdens on businesses.
As the bill progresses through the legislative process, stakeholders and businesses will be closely monitoring its impact on the operational landscape. The amendments represent a positive step toward creating a more efficient and business-friendly tax framework, supporting the government’s commitment to facilitating economic activities in Pakistan.
