Islamabad, Nov 18: The Accountant General Pakistan Revenues (AGPR) and the Federal Board of Revenue (FBR) have made a significant decision to update the SAP (Systems, Applications, and Products in Data Processing) system to improve tax adjustments for salaried workers and pensioners.
This update is designed to address issues with excessive tax deductions and eliminate the lengthy refund process.
The Federal Tax Ombudsman (FTO) previously recommended modifying the SAP system to facilitate smoother tax adjustments and credits for salaried individuals.
The AGPR has expressed its general agreement with this proposal and will discuss the details in an upcoming internal meeting.
The AGPR clarified that tax adjustments would be made up to the taxpayer’s liability, with the FBR providing necessary details about the applicable sections of the tax code.
At present, the withholding tax deduction procedure at the District Account Offices (DAO) has been criticized for not allowing tax credits, leading to over-deductions.
An investigation by the FTO revealed that many salaried individuals faced excessive deductions despite being eligible for tax benefits under the Income Tax Ordinance, 2001.
The FTO has urged the authorities to update the SAP module to ensure timely tax credits and to streamline the refund process as per Section 170 of the Ordinance.
The FTO has also called on the FBR and AGPR to implement a monitoring system to prevent misuse of the new process during the withholding stage. This initiative is expected to improve adherence to tax laws and reduce administrative burdens for both taxpayers and the government.
