Private companies across Punjab are set to gain the authority to deduct income tax directly from employees’ salaries, following the approval of the Punjab Finance (Amendment) Bill 2025 by the Punjab Assembly’s Standing Committee on Excise.
Chaired by Agha Ali Haider, the committee approved the bill during a session that saw participation from officials of the Excise Department, as well as the Law and Finance Departments.
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The bill outlines a significant change: accounts officers in private firms will now be responsible for withholding income tax from workers’ monthly pay.
The move is aimed at strengthening tax collection mechanisms in the private sector and tackling underreporting of income. According to the committee, Drawing and Disbursing Officers (DDOs) at private companies will now ensure income tax is subtracted before employees receive their salaries.
Furthermore, the bill includes a provision for accountability. If a company fails to deduct or deposit the required tax, the Excise and Taxation Officer will be tasked with recovering the outstanding amount.
All tax collected through this method will be deposited into the government treasury.
The bill, having cleared the standing committee stage, is now expected to be presented before the full Punjab Assembly for final approval.
