FPCCI President urges FBR to withdraw show cause notices

KARACHI: President Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Mian Nasser Hyatt Maggo has urged the Federal Board of Revenue (FBR) to withdraw show-cause notices issued under section 161(1A) of Income Tax Ordinance 2001 read with rule 44(4) of income tax rules 2002.

In a statement, President FPCCI informed that a compliant taxpayer is obliged to deduct tax at source under various sections of the Income Tax Ordinance 2001 and deposit in the treasury in the prescribed manner with respect to purchases, payments and expenses.

He said that majority of taxpayers receiving monitoring notices assuming that the taxpayer has not deducted any tax under all sections and has not deposited any amount in the government exchequer.

He added that taxpayers are required to submit all details against this notice even though they have already filed the withholding tax returns as required by the law.

He further added that many suppliers receive exemption certificates from FBR and the customer is not required to deduct tax at time of payment. All commercial importers pay withholding tax at import stage and subsequently no tax on suppliers are withheld by the customer.

Similarly, he said all textiles related products come under the one percent withholding regime but notices are being issued to majority of textile companies to show that they have deducted 6.5 percent taxes on all their purchases which is 6.5 times of required deduction.

He further said that a standard format of notice is issued to all these taxpayers mentioning the highest rate of withholding tax which is prescribed under the mentioned sections.

He said that the amount deposited by the compliant tax payer should be considered before the notice is issued of the assumed amount. He demanded FBR to withdraw all such notices as it discourages broadening of tax base.