The Progressive Group in the Lahore Chamber of Commerce and Industry, (LCCI) backing a strike call by traders going against the 0.3 percent withholding tax on banking transactions, has urged the government to "wisely and amicably" resolve this issue with the consultation.
Group President Khalid Usman, Deputy Secretary Muhammad Ejaz Tanveer and Abdul Wadood Alvi in-charge election campaign Associate Class in a joint statement on Wednesday said the constitution of committees by the Federal Board of Revenue trying to help the traders would never work.
"The government should pay attention to the real cause of concern. This kind of indirect tax will have a multiplied impact on the transactions. It is hampering the banking transactions and using formal money in transactions channels," they said. "This tax will not only decrease economic activity but also encourage people to handle all their transactions in cash to avoid taxes. It will also hamper the government efforts of expanding the tax net."
They went on, "It is also not understandable that the government has levied this tax simultaneously on filers and non-filers. So, those who are registered and filing their tax returns and contributing to the national exchequers have to face this harsh tax as well. Banks are deducting this tax from filers and non-filers alike with suggestion that filers can claim input later on while everybody knows how difficult it is to claim refunds from the bureau.
"This tax discouraging the use of banking channels will also hamper the business of largest service sector ie banking sector thus leading to loss of revenue to the national exchequer which is collected on banking services. 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should understand that protests and strikes always hit the economic activities hard, therefore this tax should be withdrawn immediately in the larger interest of the economy."
They also said their group was with all the trade and industrial associations. They said the traders had very high hopes with the meeting convened by the federal finance minister to discuss the issue with all the stakeholders and traders of this tax and its negative impact on the economy and urged for immediate withdrawal of this tax.
The Group leaders said the bureau's big wigs, instead of suggesting such indirect taxes, should mobile its officers and officials to expand tax net by identifying the potential areas and suggest direct taxes as indirect taxes also enhance the possibilities underhand deals.
The government should take all trade and industry related decision in consultation with the business community which is backbone of the economy. 'Nobody is against paying of taxes or expansion of tax net but these should be done in a rational manner,' leaders Usman and Tanveer said.
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