Decision to impose WHT on saving schemes triggers protests: DG CDNS informs Senate panel

Director General Central Directorate of National Saving (CDNS) Waqar Ahmed Wednesday said the government decision to impose withholding tax on saving schemes led to protests by investors. "We are facing resistance from CDNS investors on withholding tax imposed by the government," acting DG informed Senate Standing Committee on Finance chaired by Saleem Mandviwalla to get briefing CDNS on role, responsibilities and performance. He added that investors have also approached Federal Ombudsman against the withholding tax.
"When we deduct withholding tax from small investors in CDNS schemes, investors start fighting with us. But we are deducting withholding tax on saving schemes as per budget decision," he said. Senator Kamil Ali Agha said this is the precise reason gross national saving as percentage of GDP of Pakistan was only 14.5 percent compared to 39 percent in Bangladesh and 43 percent in Nepal.
He stated that saving is very important for any nation but it was on decline in Pakistan. "We need to take this aspect into account whether CDNS was being destroyed deliberately to benefit some other sector," he added. The DG CDNS said investment schemes of CDNS are for three to 10 years period and investors are paid profit after every six months. So far, he added Rs 2,414 billion investment has been made in CDNS schemes since inception of the organisation.
The committee expressed complete dissatisfaction over the performance of CDNS and sought its performance analysis of last 10 years. The finance committee also pointed out the audit objections with respect to expenditure of CDNS. The meeting was also informed that the CDNS products are also being offered by other agencies such as the State Bank of Pakistan and Pakistan Post for which they are given commissions. Out of the total 7.3 million CDNS investors, 0.9 million are with the SBP and 2.3 million with Pakistan Post while 4.2 million are directly dealing with CDNS.
The total number of branches of CDNS in the country are 374 with 1,976 in Punjab, followed by 93 in Sindh, 54 in KP, 15 in Balochistan, two in Gilgit Baltistan, five in AJK, nine in Islamabad and one in Fata. A senior official of the Finance Ministry dealing with banking, Akbar Sharifzada assured the committee that composition of House Building Finance Corporation (HBFC) Board would be completed in a month.