The tax will be adjusted in accordance with AGPR’s tax responsibility, according to the agreement made between Accountant General Pakistan Revenues (AGPR) and Federal Board of Revenue (FBR).

The Federal Tax Ombudsmen (FTO) recommended the upgradation of SAP module to provide facility to salaried class and pensioners regarding tax adjustment. It will prevent the lengthy process of refunding.

Besides, a recommendation was proposed to form a monitoring mechanism to curb potential corruption. Here, the SAP stands for Systems, Applications, and Products in Data Processing.

In light of these recommendations, a meeting under the chair of the Accountant General Pakistan Revenues (AGPR) was held in his office. The AGPR gave nod to the proposal. However, he stated that the proposals would be reviewed thoroughly in the internal meeting of the AGPR, which would be held during the current month.

During the meeting, the participants agreed that tax will be adjusted in line with AGPR’s tax liability and details will be shared with Federal Board of Revenue.

The enforcement of these recommendations and further meetings with the office of the AGPR may require policy-level decisions. The AGPR has requested the FBR that the IR (Policy) wing can make further correspondence with the AGPR regarding the implementation of the proposals.

At present, the mechanism of current withholding is being applied for tax deduction at District Account Office (DAO) level, as they are not allowing tax credit to the salaried individuals.

The FTO’s investigations reveal that all the complaints (salaried class) face the issue of excessive tax deduction at the stage of deduction at source, in spite of the fact that they are eligible for the benefit under Clause (2) of Part Ill of Second Schedule to the Income Tax Ordinance 2001.

The investigations further exposed that the department had failed to comprehend the complaints raised by this forum to address the issue and evolving method to ensure strict adherence to substantive law policy despite provision of law with regards to withholding tax under section 149 that allows mandatory credit to tax withheld under other heads during the current period.

The FTO recommended that the FBR should devise a clear mechanism of monitoring to avoid the misuse of the mentioned facility.