Once again displaying its heavy-handed approach towards taxpayers, the Federal Board of Revenue (FBR) has been issuing notices to salaried individuals, alleging that they have improperly claimed tax credits in their returns.
This move appears to be a desperate measure to meet the FBR’s persistently unrealistic revenue targets. The Karachi Tax Bar Association (KTBA) has raised serious concerns over what it calls taxpayer harassment in a letter to the Member Inland Revenue Operations. The letter reveals that hundreds of salaried employees have been served notices over supposed tax deduction discrepancies—issues that often arise when tax officials either fail to verify deductions on the IRIS portal or cannot recover withheld tax from employers.
Anyone with even a basic understanding of Pakistan’s tax system would recognize the unfairness of making employees responsible for discrepancies in their tax deductions, essentially holding them accountable for their employers’ failure to deposit the correct amount.
As is widely known, employers deduct income tax from employees’ salaries each month and submit it to the FBR. At the end of the financial year, employees file their tax returns based on salary certificates provided by their employers, which outline their total earnings and tax deductions. These certificates also allow employees to claim any applicable refunds or tax credits. As the KTBA rightly points out, any shortfall or unpaid tax should be addressed by holding the withholding agent—the employer—responsible, rather than unfairly pressuring individual employees.
