Apropos 'Enhanced rates of WHT for IT non-filers: Banks term govt move impractical' carried by Business Recorder on Thursday, country's banks have taken a highly plausible stance towards an unprecedented measure introduced by the incumbent government. How could the government subject the existing banking sector to such a highly unsavoury and cumbersome procedure? The Pakistan Banks Association (PBA) has therefore rightly termed Federal Board of Revenue (FBR) documentation measure of charging enhanced rates of withholding tax from non-filers of income tax returns practically impossible in the existing banking system.
The newspaper report says: "To comply with the proposed amendment through Finance Bill, banks would have to make significant changes in their systems. Each branch of a bank to identify filer/non-filer status after consulting each customer, which would be tagged separate tax rates to calculate and deduct tax. The proposed increase in withholding tax rate for non-filers would adversely affect saving behaviour of people and promote cash economy. Consequently, it would create a formidable obstacle towards government's objective goal of documentation of economy."
The government is therefore required to rescind its decision without any further loss of time.