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The National Board of Revenue (NBR) has stepped up nationwide monitoring to ensure that withholding tax is properly deducted and deposited into the state treasury.
Special teams from tax zones have already begun field-level inspections and verification drives across the country.
In a press release issued on Sunday, the NBR said taxpayers and businesses should remain aware of the legal powers granted to tax officials under Section 147 of the Income Tax Act, 2023.
Under the law, tax officials are authorised to enter the offices, business premises or commercial establishments of any entity to conduct on-site inspections. They may examine or request account books, vouchers, bank statements, receipts and other documents related to financial activities.
The officials are also empowered to inspect information stored in computer systems, cloud servers, digital records and electronic devices. Where necessary, they may access encrypted data by obtaining passwords or bypassing encryption, the statement said.
To verify the accuracy of withholding tax deductions, tax officials may temporarily seize account books, documents, electronic records or digital devices for examination. They are also authorised to collect copies of documents, images or account records and mark or seal them for identification.
The NBR warned that obstructing or failing to cooperate with tax officials during such inspections could result in penalties under Section 147(2) of the Income Tax Act, 2023.
The revenue authority urged taxpayers to deposit withheld taxes into the government treasury through the e-Challan system, ensuring that the correct legal provision and designated economic code are mentioned during payment.
According to tax officials, the intensified monitoring aims to strengthen transparency and accountability in withholding tax collection and curb revenue evasion through more effective field-level supervision.