FBR Rolls Out Updated System for Withholding Tax Documentation
By
March 22, 2024
The Federal Board of Revenue (FBR) has just put into action a fresh system to record withholding tax (WHT) transactions. This means they want to make sure that when taxes are held back, they’re documented properly, and the withheld amount is sent over promptly by the folks doing the withholding.
So, what’s the deal with this new system?
Well, the FBR has issued some final rules called SWAPS rules. These rules say that the guys who hold back taxes, also known as “SWAPS Agents,” need to set up special electronic devices and software. These tools will help them handle any transactions that involve withholding tax.
And here’s the kicker: Once these rules kick in, SWAPS Agents can’t do any transactions unless the person they’re dealing with has the same name on their CNIC, NTN, and IBAN.
Plus, there’s this thing called SWAPS Payment Receipt (SPR). This receipt is super important because it’s the only proof that tax was collected or taken off. And if a SWAPS Agent needs more time to get on board with these rules, they can ask the tax authorities for an extension.
But hey, if any SWAPS Agent tries to dodge these rules, they could get hit with penalties under the Income Tax Ordinance, 2001. So, better stick to the rules!
