An official audit report has stated that FBR failed to recover Rs 20.56 billion in withholding tax from 681 defaulting withholding agents across 19 field offices during audits relating to fiscal years 2024 and 2025.
The defaults involved cases where tax was either not deducted from payments to suppliers, contractors and service providers or was deducted but not deposited into the government treasury within the prescribed time. Although FBR informed the auditors that legal proceedings had been initiated, the report stated that no further progress had been communicated before finalisation.
The audit also noted that similar irregularities had appeared repeatedly during the previous five years, with a cumulative financial impact of approximately Rs 134.5 billion. The findings indicate that withholding-tax monitoring requires stronger desk audits, faster proceedings under the applicable law and closer tracking of amounts already deducted from taxpayers but not deposited by withholding agents.