Chief Executive of Trade Development Authority (TDAP) S M Muneer, who is also patron-in-chief of Korangi Association of Trade and Industry (KATI), has sought the intervention of Prime Minister Nawaz Sharif to direct concerned authorities to withdraw controversial withholding tax on banking transactions, as the fragile economy can not afford any protest or agitation.
He said that the trade and business community was in state of agony due to deduction of 0.6 percent withholding tax by banks on all type of transactions from non-filers of income tax returns. He said that most of the transactions from July 01 had been shifted to cash payment, which was also affecting the banking system. He said that the withholding tax in income tax form had been implemented in Pakistan for the past several years yet the tax machinery failed to increase the return filers as at present the return filers were around 0.88 million.
The figures of return filers show that the measures taken in the past have proved counterproductive as the number of return filers further decreased last year, S M Muneer said and added that Federal Board of Revenue (FBR) should adopt alternative measures to enhance the taxpayers instead of taking measure that discourage people from becoming registered persons.
He further said that Pakistan's banking system was one of the best and it was resilient even in the time of global financial crisis. Such measures will also hurt the banking industry, which was contributing major share to the national revenue collection. President KATI Rashid Ahmed Siddiqui also urged the government to avoid such measures which create chaos in the system. He said that city like Karachi could not afford further disturbance. He said that the government should facilitate the business community, which was already facing multiple issues including law and order, electricity crisis, water shortage etc.
KATI President said that withholding tax on banking transaction had affected entire business community irrespective of manufacturers, distributors or wholesalers/retailers. He appealed to the prime minister, the president, finance minister and chairman of Federal Board of Revenue (FBR) to revisit the decision.