Banking transactions: Take back the 0.6% withholding tax

Sabri said the increased reliance of the government on withholding taxes could become counterproductive


Our Correspondent July 05, 2015
PHOTO: FILE

ISLAMABAD:


Local traders have urged the government to immediately withdraw the 0.6% withholding tax on all banking transactions imposed on non-filers.


They said the tax will discourage banking transactions and instead, promote non-banking and cash transactions, which will have harmful consequences for the economy.


The government has imposed advance adjustable income tax at a rate of 0.6% on all banking transactions of over Rs50,000 in a day for non-filers in a bid to compel them to become tax return filers.


Islamabad Chamber of Commerce and Industry (ICCI) President Muzzamil Hussain Sabri said the decision will lead to many complications and it will cause a drop in bank deposits, promote the culture of cash transactions, affect profit margins of taxpaying businessmen and enhance turnover tax for filers.


Sabri said the increased reliance of the government on withholding taxes could become counterproductive as it will further incentivise non-filers to conduct cash transactions and promote informal economy. 


Published in The Express Tribune, July 5th, 2015.

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COMMENTS (8)

Imran | 5 years ago | Reply Stupid decision of STUPID Government, should revert ASAP, Don't impose unnecessary Tax to people of Pakistan. Nawaz Ishaq, Zardari should clean their NAB cases. They have lotted and also did money laundering. Kush Sharm hoti hai kush Haya hoti hai but these people don't understand.
Imran Qureshi | 5 years ago | Reply 0.6% for non filers and 0.3% for filers. For filers there is no change. Those who are crying must file income tax at their earliest. They can even file zero tax return to become filer. Everything is online and you can do it from your home. What is the problem. Problem is tax evasion. Tax evaders do not want to pay tax. A poor person not eligible for income tax does not withdraw more than 50K in a day. Those drawing even 100K in a month can do it in 2 or 3 transactions to avoid this tax. All tax evaders will cry on the imposition of this tax. This should not be revoked. All should come under tax net. Those crying on this tax are either unaware how easy it is to become filer which has numerous advantages or they are tax evaders. There should be no soft corner for Tax evaders. I fully support this decision of sitting GoP.
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