NBR intensifies nationwide monitoring of withholding tax compliance

The National Board of Revenue (NBR) has intensified nationwide monitoring and verification of withholding tax compliance through special teams of its tax zones.

In a press release issued today (19 July), the NBR urged all concerned to remain aware of the powers vested in tax officials under Section 147 of the Income Tax Act, 2023.

According to the release, Section 147 authorises tax officials to enter and inspect, without obstruction, the premises, business centers, or offices of any commercial or economic establishment.

The officials are also empowered to examine and requisition books of account, vouchers, bank statements, receipts, and any documents related to economic activities.

The law further authorises tax officials to inspect information stored in computer systems, cloud servers, digital records, or electronic devices and, where necessary, gain access by bypassing passwords or encryption.

To verify the accuracy of taxes deducted at source, officials may temporarily seize and retain account books, documents, electronic records, or devices in their custody.

They are also authorised to collect copies of documents, images, or account records and affix identification marks or official seals where necessary.

The NBR said Section 147(2) of the Income Tax Act provides for penalties against any person who creates obstacles or refuses to cooperate with tax officials in carrying out these revenue collection activities.

The revenue board requested taxpayers deposit taxes deducted at source into the government treasury through the e-Challan system by correctly mentioning the relevant legal provision and the appropriate economic code.

The NBR also advised taxpayers facing any ambiguity, complexity, alleged harassment, or grievance regarding the implementation of Section 147 to contact the member secretary of the NBR Committee on Section 147.