WHT on bank transactions: government urged to resolve issue through consultation

The President of the Multan Chamber of Commerce and Industry, (MCCI) has urged the government to resolve the issue of 0.3 percent withholding tax on banking transactions, with the stakeholders' consultation. Mian Iqbal Hassan MCCI President said, "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." Mian Iqbal Hassan said, "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should understand that protests and strikes always hit the economic activities hard, therefore this tax should be withdrawn immediately in the larger interest of the economy. "He said 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".