NBR intensifies nationwide monitoring of withholding tax compliance

The National Board of Revenue (NBR) has intensified nationwide monitoring and verification of withholding tax deductions through special teams formed under its tax zones, the NBR said in a press release issued on Sunday.

The NBR urged all concerned to remain aware of the powers granted to tax officials under Section 147 of the Income Tax Act, 2023.

Under the provision, tax officials can enter and inspect the premises, business centres or offices of any commercial or economic entity without hindrance. They can examine and demand account books, vouchers, bank statements, receipts and other documents related to economic activities.

Officials are also authorised to inspect data stored in computer systems, cloud servers, digital records or electronic devices and may break passwords or encryption if necessary. They can temporarily seize and retain account books, documents, electronic records or devices to verify the authenticity of deducted tax and collect copies of documents, images or accounts using identification marks or seals.

Section 147(2) provides for penalties against anyone obstructing or refusing to cooperate with such revenue collection activities, the NBR said.

The board has requested taxpayers to deposit withheld tax to the state treasury through the A-chalan system, citing the correct legal section and economic code. Taxpayers facing harassment or complications may contact the member secretary of NBR’s Section 147 committee via email.