Written by Hamza Shahnawaz Audit finds 472 withholding agents failed to deduct tax on rental payments across 17 FBR field offices ISLAMABAD: The Federal Board of Revenue (FBR) has failed to recover more than Rs1.02 billion in withholding tax on income from property after hundreds of withholding agents did not deduct tax on rental payments, according to the latest audit report of the Auditor General of Pakistan (AGP). The audit, covering fiscal years 2022-23 and 2023-24, found that 472 withholding agents across 17 FBR field offices failed to deduct withholding tax while making rent payments to owners of immovable properties, resulting in significant revenue losses. Audit Highlights Rs1.02 Billion Tax Shortfall According to the AGP report, Section 155, read with Section 161 of the Income Tax Ordinance, 2001, requires prescribed persons to deduct withholding tax at the applicable rates when making rental payments. Where tax is not deducted or deposited, the Commissioner Inland Revenue is empowered to recover the unpaid amount through legal proceedings. The audit estimated that the failure to comply with these provisions led to the non-recovery of Rs1.017 billion in withholding tax. The audit observations were communicated to the FBR between February and November 2024. Limited Recovery Despite Legal Proceedings In its response, the FBR informed auditors that only Rs1.02 million had been recovered…