Contrary to traders' claims: WHT has not affected bank deposits, says SBP governor

Govt’s meeting with traders ends in deadlock, main representatives not present

ISLAMABAD:

Amid gridlock between traders and the government over the issue of withholding tax (WHT) on banking transactions, State Bank of Pakistan Governor Ashraf Wathra said on Tuesday that the central bank has not witnessed any major variations in the deposit base of banks.

Wathra’s statement negates the claim of traders who said that depositors have started withdrawing cash from banks after the imposition of 0.3% tax on every banking transaction.

“So far, the central bank has not witnessed any major variations in deposit volumes of the banking sector in the aftermath of imposition of WHT on all banking transactions,” said Wathra while talking to journalists after attending a meeting of the Senate Standing Committee on Finance.

However, the governor maintained that it was premature to give any judgment on the impact of imposition of WHT on banking transactions due to Eid holidays. He said that the central bank was closely monitoring the banking sector.

Meanwhile, the government’s efforts to resolve the dispute with traders sustained a serious setback when the mainstream leadership of the business community boycotted Tuesday’s meeting that the government had convened.

Neither Finance Minister Ishaq Dar attended the meeting nor did representatives of the All Pakistan Anjuman Tajaran come to attend the session that had been called on Tuesday morning in the Federal Board of Revenue’s Headquarter. The traders’ boycott suggests that they would go ahead with their plan to observe a strike on August 1.

Only district level representatives of the traders attended Tuesday’s meeting who too were the office-bearers of the ruling PML-N. The government presented them to the media as representatives of traders.

“It is a golden opportunity for the traders to resolves all outstanding issues, as the PML-N government has a soft corner for traders,” said Special Assistant to Prime Minister on Revenue, Haroon Akhtar Khan.

Khan warned that if traders missed this chance, they may face problems in the future as the government is going to pass a law to forbid having benami bank accounts.

The benami accounts are maintained by politicians, bureaucrats and business community in the names of their employees and other relatives to keep their assets outside the formal economy.

Khan said the government has constituted three committees to address the genuine issues of business community. The committees have been formed to address concerns about income tax, sales tax and a committee on communication has also been setup to reach out the traders, he added.

Khan said that these committees would submit their reports by August 14, which will become the base for taking a decision. The special assistance to the premier hoped that the traders would end boycott and start participating in the deliberations.

There was trust deficit between traders and the government and that has to be bridged, said Parliamentary Secretary Finance Rana Muhammad Afzal.

Published in The Express Tribune, July 29^th, 2015.

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