Banking transactions: KATI shares dismay over imposition of 0.6% tax

Says many businesses opting for cash payment to avoid the tax.


Our Correspondent July 07, 2015
KATI President Rashid Ahmed Siddiqui, in a statement on Monday, said the trade and business community was in a state of agony due to the imposition of 0.6% withholding tax. CREATIVE COMMONS

KARACHI: As the news of imposition of 0.6% withholding tax on banking transactions spread, several organisations and institutions have started voicing their concern over the levy.

The latest organisation adding its voice to the chorus is the Korangi Association of Trade and Industry (KATI), which has urged the government to withdraw the tax on banking transactions as it is hampering daily business activities.

KATI President Rashid Ahmed Siddiqui, in a statement on Monday, said the trade and business community was in a state of agony due to the imposition of 0.6% withholding tax on all types of banking transactions from non-filers of income tax returns.

He said most of the transactions from July 1 had been shifted to cash mode, which was also affecting the banking system.

KATI Patron-in-chief and Trade Development Authority of Pakistan (TDAP) Chief Executive SM Muneer said the withholding tax had been implemented in Pakistan for the past several years, yet tax authorities had failed to increase the number of return filers as at present they were just around 0.88 million.

This showed that the measures taken in the past had proved counterproductive as the number of return filers further decreased last year, Muneer said, adding the Federal Board of Revenue (FBR) should adopt alternative measures to enhance the number of taxpayers instead of taking steps that discouraged people from becoming registered with the tax authorities.

“Pakistan’s banking system is one of the best and it has been resilient even during the global financial crisis. Such measures will hurt the banking industry, which is contributing immensely to the national revenue collection.”

The KATI president urged the government to avoid undertaking measures that created unnecessary chaos in the system. “Already a tormented city, Karachi cannot afford any further disturbance,” he said.

Published in The Express Tribune, July 7th, 2015.

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COMMENTS (6)

Johnson Jones | 6 years ago | Reply The government of Pakistan has to deal with a very real problem: On one hand the tax collection machinery is inefficient and corrupt and on the other hand the businessmen and potential tax payers are not filing their tax returns The government has to rope in these delinquents. So this law should stay and tax collection organization has to be massively reformed. Internationally community is now pretty tired of funding Pakistan with it's taxpayers money when citizens of Pakistan do not pay their taxes
Haris Khan | 6 years ago | Reply Its a great step, we should support this law !!! Why don't theses trading associations tell traders to become filers !!! Such a shame that media is supporting them Its the first time the wholesale traders are being persuaded to come in tax net !!!
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