Finance Minister Ishaq Dar on Wednesday announced to constitute another committee to review withholding tax on banking transactions after day long negotiations with traders. Talking to media after negotiation with traders, he said out of 18 demands submitted by the traders, government accepted their 16 demands. Dar said that the government would announce a special package for traders on November 15, 2015, as all the issues with traders have been settled amicably.
Dar said that reduction in the rate and threshold for collection of withholding tax on banking transactions on non-filers would be discussed after deliberation on 16 demands agreed between the two sides for consideration. Finance Minister further said that issue of reducing withholding tax on banking transactions would be addressed after the committee's report was finalised.
Meanwhile, an FBR official, who was part of the negotiation, told Business Recorder that the committee would be notified on Thursday after receiving names from traders. The committee recommendations would be finalised by November 15 for taking decision on withholding tax rate and threshold on banking transactions. The traders delegation led by Ajmal Baloch postponed their planned strike against the withholding tax on banking transactions. "We will wait for the package to be announced on November 15. Therefore, traders postponed the strikes for a month," Ajmal Baloch said while talking to the media.
Meanwhile, special Assistant to Prime Minister on Revenue, Haroon Akhtar has said that a special package for textile sector would be announced by the end of October as at present the package is being prepared. "We are working on All Pakistan Textile Mills Association (APTMA) demands but their demand to reduce electricity and gas prices may not be possible for the government as it would create discrimination to the other sectors," he added.
"APTMA wants cheap electricity and gas, if government gives cheap electricity and gas to one sector, the same concession has to be given to other exporting sectors," he said adding that Federal Board of Revenue (FBR) has cleared Rs 30 billion refund of textile sector till May 2015. He questioned the justification of their strike when government has given them assurance to resolve their problems. The government had initiated negotiation with the industry in August 2015 after it threatened to go on strike against surcharges on electricity and Gas Infrastructure Development Cess (GIDC).
The industry said that gas surcharges on electricity and GIDC were not acceptable to them as cost of electricity was almost twice in Pakistan compared to other regional countries. The Aptma also contended during negotiation with government authorities that electricity in Pakistan was Rs 14.50 per unit against Rs 7 to Rs 8 in other regional countries. Finance Minister had constituted three committees with the one headed by Special Assistant to Prime Minister on Revenue on viability issues of the industry and taxes while the second committee was headed by Chairman FBR on refund and other taxes. The committee on Commerce was constituted to look how the industry can be facilitated - the export-oriented industry in local taxes.