ISLAMABAD: Federal Board of Revenue (FBR) Member and Director General Withholding Tax Seema Majid has said that it is very heartening to see the public, in general, is getting aware and being sensitized to the significance of paying taxes. It is still not enough to manage issues as only one third of the total potential taxpayers are paying taxes, which is far below the minimum level required for balancing the fiscal order. There exists a huge potential for generating more and more revenue prerequisite for the prosperity of the country.
Federal Board of Revenue (FBR) Member and Director General Withholding Tax Seema Majid expressed the views during an exclusive interview with Customs Today.
Seema Majid pointed out that there was 35 percent growth overall in the revenue collection of which withholding tax contributed 95 percent. “If people start thinking positively and adopt approach towards the object of “pay as much as you owe,”, there will be windfall tax, means plenty of revenue and no tax evasion, an ideal situation that will bring forth only development and prosperity,” she elaborated and added that there was a concept prevailed among mostly people that they were not oblige to file return of their income tax after tax had been deducted automatically from their salary which was totally (wrong). “Filing tax returns is an obligation and all and sundry should follow it,” the FBR member stressed.
The DG Withholding tax declared that imposition of taxes on parliamentarians had conveyed a clear message that nobody was above and over the law and everyone should pay tax. This step also dispelled the impression that deduction at source is enough and there is no need for filing return, she claimed, adding that there should be education of the law on tax payment which definitely came through the process of filing tax return. To a question, Seema Majid informed that about 28 parliamentarians had not filed their returns so far which did not make any good impression on others, especially on the masses, adding that the law provided that everyone should abide by the law at all costs. “The enforcement of law should be more strong, firm and polite at the same time as we are a public entity,” the FBR member maintained.
Moreover, Seema Majid argued that there was a dire need for strengthening the system as the more the system get strong, the things would automatically come into line and become easier and more accurate at the same time. She said that secondly, when one talk about withholding tax there were more than 50 provisions pertaining to this single department but lack of knowledge about it often result in mishandling and leakage in rates.
“Thirdly, there are cases in which deduction has been made by withholding agents but did not deposit the money in the government treasury which often leads to imposition of fine on the taxpayer who, otherwise, has paid the money he owed,” she explained.
“In the current financial year up to January, there are 29,498 cases wherein withholding audit – both in field and at desk, has been conducted,” the withholding tax DG informed, adding that of these total cases, orders under section 161/205/182 in 4,702 cases had been taken out of which Rs31,358 million demands were created.
“Rs3,804 million have been collected till January and the remaining collectable balance is Rs27,553 million,” Seema Majid revealed. She said that for this purpose, the department had to conduct analysis from time to time which was indeed a difficult process.
The FBR member shared that monitoring, innovation and education were the most important tools that enabled one to rise to the day-to-day challenges in this field. She asserted that it was an appreciable effort that at every RTO, there was an exclusive withholding tax zone which had been facilitating revenue collection in a befitting manner. “Look, these exclusive withholding tax zones can produce even better results if the shortage of manpower is overcome as owing to the large number of provisions, these sections are almost shorthanded,” the FBR member emphasised.
There are, Seema Majid, said three important conditions for efficient working of the department that included – increase in the number of staff along with training and availability of professional working environment.
Last but not least, the computerisation of the entire withholding tax system will definitely opens up new vistas, lessen work burden and minimise corruption chances, leading to increase in revenue generation,” the withholding tax DG concluded.