LAHORE, Feb 27: The monitoring teams of Central Board of Revenue will start visiting large public and private employers as well as suppliers from Friday to assist and advise them on how to “correctly” deduct withholding tax from the salaries of their employees or on their purchases.

“Our perception is that the people (organizations and suppliers) are not deducting correct tax due to wrong information or lack of it (on the law). We want to help them. Our monitoring teams will visit various organizations in all major cities to sit with their accounts departments to help them deduct correct amount of tax. Similarly, the suppliers will be helped in deducting correct withholding tax on their purchases,” CBR member (direct taxes) Vakil Ahmed Khan told a selected group of reporters here on Wednesday.

He expects a “lot of additional revenue as a result of this campaign” that will continue at least till the end of current fiscal year.

Total collection of withholding tax constitutes 60 per cent of the entire amount of direct taxes generated by the government. It is being presumed that the need for undertaking this exercise has been necessitated by the enhancement of the direct tax collection to Rs146.5bn from Rs140 billion for the current fiscal.

The CBR has collected Rs76 billion in the first seven months (July to Jan) of the current fiscal, which is 12 per greater than last year. The CBR collected Rs124 billion in direct taxes in 2000-01.

The finance division has already cut the tax revenue target of Rs445 billion for the current fiscal down to Rs415bn due to Pakistan’s decreased exports and general economic slowdown around the world following the Sept 11 events. The cut shows a reduction of Rs34 billion in the target of indirect taxes.

Khan said the monitoring programme would increase revenues and broaden tax base. He said it would not be a punitive campaign and no penalty would be imposed. The monitoring teams will stay for a period of 7-15 days in an organization depending upon its size.