Traders remain divided

Some say they will file returns; others continue to get irked by withholding tax

KARACHI:

If the government is willing to bend the law, a reaction from traders and their willingness to now file their returns needs to be explored.

While traders are still divided over the tax amnesty scheme, those who support it say it will be a success unlike the previous schemes.

By success, they mean the government will succeed in widening the tax net -- one of the biggest challenges for the ruling party.



The Income Tax Amendment Bill 2016, which has been cleared by the National Assembly, is expected to be signed by President Mamnoon Hussain.

Tax experts say the need of proposing one scheme after another is in itself a clear sign that all such previous schemes were disasters.

“The scheme has the potential to increase the number of taxpayers, but the ball is in the government’s court,” said All Pakistan Anjuman-e-Tajran Central General Secretary Naeem Mir, a Lahore-based trader who led the traders’ faction that supported the new amnesty scheme in weeks-long negotiations with the government.

“Traders are ready to cooperate with the government and the FBR in implementing the new scheme. Those who say they oppose this scheme are just limited to newspapers’ statements.

“If they are that against this scheme, why don’t they come on the streets to reject it?” he asked.

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) says it has played a vital role in bringing different traders’ alliances on the table.

Mir said the document government and traders signed at the end of negotiations was also signed by the then FPCCI president.

The other side

Meanwhile, there remains a different breed that says the scheme will backfire, leaving many confused and looking forward to the end of the year when tax returns are filed.



“We don’t think this tax amnesty scheme will be a success. I bet you not even 10 traders will file their tax returns,” All Pakistan Anjuman-e-Tajran President Khalid Pervaiz said.

Traders oppose this scheme because they are against the withholding tax government is charging on all banking transactions above Rs50,000 for non-filers, said Pervaiz. also a Lahore-based trader and led the faction that opposed the scheme.

The government is acting like a martial-law administrator and trying to collect taxes forcefully, which can never be accepted in any form, he said, adding that no government can succeed in collecting taxes in such a way.

Traders who are opposing the scheme say this will only force them to stop conducting any transactions through banks, and that will strengthen the black economy in the country.

We have boycotted banks and we are still saying that there should be no forceful tax collection, added Pervaiz.

“We think traders should be part of the tax net so we are supporting it,” Sindh Tajir Ittehad Chairman Jameel Paracha said.



“This is different from other schemes because this time the government and FBR negotiated with traders,” said Paracha, who was also present during the negotiations with the government.

There are many traders’ alliances in the country that have their representatives or chapter heads in major cities. Initially, when the government imposed 0.6% withholding tax in mid-2015, almost every other alliance opposed it and threatened mass protests against the government.

the writer is a staff correspondent 

Published in The Express Tribune, February 1^st,  2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.