Mohsin Siddiqui (Chief Reporter)

The Federal Board of Revenue (FBR) has introduced a cutting-edge system aimed at documenting withholding tax (WHT) transactions promptly and ensuring the timely deduction and transfer of WHT by withholding agents in real-time.

In this crucial development, the FBR has mandated that “SWAPS Agents” (withholding agents) install and integrate fiscal electronic devices and software to facilitate the seamless execution of transactions subject to withholding tax.

On Friday, the FBR issued draft SWAPS rules under S.R.O. 1846(I)/2023. According to these new regulations, SWAPS agents must adhere to specified requirements and obligations outlined in the rules. “SWAPS” refers to the FBR’s web-based portal or any computerized system utilized by notified SWAPS Agents, integrated with the Board as communicated periodically, specifically designed for processing payments related to goods and services.

Effective from the date announced by the Board, SWAPS Agents are prohibited from conducting any specified transactions unless the CNIC, NTN, and IBAN of the withholdee match.

The SWAPS Payment Receipt (SPR) stands as the sole evidence of tax collection or deduction, covering claims for refunds or tax credits. Should a notified SWAPS Agent experience delays in registration or integration, an extension may be requested through IRIS, addressed to the Commissioner Inland Revenue, citing the reasons for the delay, as stated by the FBR.