KARACHI: FBR’s IT wing, Pakistan Revenue Automation Limited (PRAL) has not been able to fix the bugs in the system due to which a large number of taxpayers are unable to e-file withholding tax statements for the months of July 2015 and onwards.
In a letter to Chairman Federal Board of Revenue (FBR), Karachi Tax Bar Association (KTBA) noted that some of the field officers had started issuing penalty notices ignoring the fact that the issues were still there and the statements could not be filed unless the bugs are fixed.
“It is requested that field officers are restrained from issuing penalty notices until the issues are fixed and withholding tax module becomes fully operational,” Mohammad Zubair President KTBA noted.
In many cases, tax deducted by the taxpayers while making payments to non-filers subject to higher rates of withholding tax is treated as excess tax deduction by IRIS portal due to subsequent change in the status of recipients as filer.
Moreover, while reporting the tax withheld, the IRIS portal requires the taxpayer (withholding agent) to declare whether the tax withheld by them was final tax or adjustable. KTBA notes that finality or adjustability of withheld tax cannot be determined by the withholding agents and they should not be burdened with the additional responsibility.
KTBA mentions withholding tax on various payments made by the taxpayers is not being calculated on IRIS withholding portal owing to the Exemption Certificate granted by the commissioner subsequent to the date the taxes were deducted while taxes not withheld on account of valid exemption certificates issued in favor of recipients are not being accepted by the IRIS portal in various instances.
The exemption limits provided in the SRO 586 of 1991 for services at Rs10,000 and goods at Rs25,000 have not been addressed in the portal.
In previous system of e-portal, there was a facility to upload separate files for salary and other than salary. In the new IRIS portal, there is no such facility and both files are to be prepared and uploaded simultaneously.
In earlier system, revision option was available but in IRIS system this option is not available to withholding agents which negates the principal of human error. Earlier, there was a possibility that taxpayer could be assigned different level of rights by creating a login ID within an organization. For this purpose a Master ID was created for an organization to allow sub-ID’s to such users with restricted permission to prepare, feed, and submit data. The non-availability of said feature in IRIS is creating problems for large organizations in delegation and separation of duties.
It has also been observed that sometimes IRIS portal does not pick the NTN of the taxpayer despite the NTN appearing on FBR records.
“The new portal is unpredictable as many users are facing problems and they are unable to file any withholding statement since its implementation,” KTBA noted in the letter and requested extension in time for filing of withholding tax statements till solution of all outstanding issues.