MULTAN: The Federal Board of Revenue (FBR) has introduced a new penalty regime for withholding agents including government departments and private companies, who would fail to collect or deduct withholding taxes through the new Synchronized Withholding Administration and Payment System from July 1, 2022.
The new regime would be applicable on government departments, engineering departments, registrar of properties, registering, recording or attesting transfer of any immovable property, motor vehicles registration authorities, the Accountant General Pakistan Revenues (AGPR) and private sector companies, and other categories of withholding agents.
In this connection, the FBR has established a new Directorate-General for Synchronized Withholding Agents System to document withholding transactions in future. The system has yet to become fully operational, but necessary staff has been appointed at the FBR Headquarters.
Under the Finance Act 2022, the “Synchronized Withholding Administration and Payment System agent” or “SWAPS agent” means any person or class of persons notified by Board to collect or deduct withholding taxes through Synchronized Withholding Administration and Payment System.
As per the new procedure, the Board may, by notification in the official gazette, notify any person or class of persons required to deduct or collect tax under the Ordinance to integrate with Synchronized Withholding Administration and Payment System and to act as SWAPS agent within the time and in the manner as may be prescribed.
The tax collected or purported to be collected or deducted or purported to be deducted under the Ordinance by a notified SWAPS agent and credited to the Commissioner through digital mode shall be treated to have been paid under section 160 of the Ordinance.
