Banking transactions: LCCI urges Dar to withdraw tax

Lahore Chamber of Commerce and Industry (LCCI) on Monday urged the Federal Finance Minister Ishaq Dar to withdraw tax on banking transactions immediately that has created unrest among business community. The LCCI Vice President Syed Mahmood Ghaznavi in a statement said, this is a double taxation which is bound to hit trade and industry hard. The government should understand that protests and strikes always hit the economic activities hard therefore this tax should be withdrawn immediately in the larger interest of the economy.
The Lahore Chamber is with all the trade and industrial associations against imposition of tax on bank transactions. If tax on all bank transactions is imposed forcefully, it would not only hamper the trade and economic activities but would also tarnish the image of the government, he added. Ghaznavi said that a number of trade and industrial associations have approached to the Lahore Chamber and informed that imposition of tax on all banking transactions has caused unrest and put the interests of business community on stake. The imposition of this tax would force business community to conduct its monetary transactions in cash that would promote the undocumented economy.
He said all business decisions should be taken in consultation 0f stakeholders. Federation of Pakistan Chambers of Commerce and Industry (FPPCI) Vice President Hameed Akhtar Chadda also asked the government to withdraw withholding tax on banking transactions immediately, otherwise businessmen would close down their operations.
The government should bring the untaxed sectors into the tax net. The imposition of tax on all banking transactions has caused unrest and put the business community on the horns of dilemma. He said that the representatives of traders and industry have opposed the government's decision of taxing all the banking transactions as it may lead to promote the culture of cash dealing, usage of non-banking channels besides hitting hard the genuine businesses. The government should have promoted transactions through banking channels but such steps will force them to pay in cash or use other non-banking channels, he added.
Chadda said that the rate of further tax for supplies to unregistered persons is being enhanced to 2 percent. A new form of Income Tax (Withholding Tax) across the board has been introduced by imposing 0.6 percent on all banking transactions and instruments issued by non-filers which are aimed at broadening the tax base. By the virtue of this tax, the FBR has put the burden of netting non-filers on registered persons, which is unlikely to bring the desired results. It will only add to the cost of doing business that would be passed on to the consumers.