Punjab Govt Imposes Stricter Tax Rules on Employees

PUNJAB (RNN TV) — The Punjab government has introduced a major amendment to the Punjab Finance Amendment Bill 2025, making it compulsory for accounts officers in both public and private institutions to deduct income tax from employees’ salaries and deposit it into the provincial treasury.

Under the new rule, accounts officers who fail to ensure proper tax deduction will be held personally liable for the unpaid amount. The amendment aims to curb widespread tax evasion and strengthen provincial revenue collection.

By placing the responsibility for compliance on institutional financial heads, the government seeks to address long-standing gaps in salary taxation. It was found that many private-sector employees underreported incomes due to insufficient employer oversight, leading to significant revenue losses.

The Excise and Taxation Department has been granted authority to issue recovery orders and collect unpaid taxes directly from negligent officers. This measure forms part of a broader reform strategy to enhance payroll transparency and improve direct tax compliance.

The amendment is expected to affect thousands of institutions and alter current practices around salary processing and auditing. Experts, however, stress the need for strong monitoring systems and staff training to ensure smooth implementation without adding excessive administrative pressure.

The move comes as Punjab faces increasing development costs and reduced federal funding, pushing the province to strengthen its own revenue streams.

Source: Web Desk