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The Federal Board of Revenue (FBR) has uncovered a significant withholding tax (WHT) evasion scheme involving property registrars, revenue officers, and lawyers in Punjab. These individuals, overseeing property transactions worth billions, collected WHT but failed to deposit these funds into the national exchequer.
As detailed in a report by BR, the FBR’s Regional Tax Office (RTO) in Sargodha conducted an electronic audit of property registrars in Punjab. The audit revealed that these registrars unlawfully withheld WHT on immovable property transactions, retaining the funds instead of forwarding them to the designated FBR accounts.
Additionally, the investigation found that fake tax challans were issued to evade authorities, with lower WHT rates applied for non-filers.
In response, the RTO has initiated recovery proceedings and prosecution against the implicated individuals under the enforcement provisions of the Income Tax Ordinance 2001. To date, over Rs388 million has been recovered from the defaulters.
The identification of revenue leakage due to WHT on property transactions highlights concerted efforts by organized groups of property registrars. If similar instances of revenue leakage are detected in other Regional Tax Offices (RTOs), the FBR could potentially exceed its revenue collection targets for the remaining months of 2023-24.
WHT collection on immovable properties is a substantial contributor to the FBR’s direct taxes collection. Beginning July 1, 2023, the rates of WHT under sections 236C and 236K of the Income Tax Ordinance 2001 were significantly increased. Notably, WHT collection from sales of immovable properties experienced a remarkable growth of approximately 340.5 percent during 2022-23 compared to 2021-22.
Read More:https://dusknews.com/category/business/