Withholding tax: Deadlock between govt and traders continues

Finance minister says some of the demands of the business community are genuine and the government will consider them

ISLAMABAD: The deadlock between the government and the business community persisted on Wednesday as the government refused to immediately accept their demands to either abolish 0.6% withholding tax or suspend it until talks reach a conclusive point.

“Some of the demands of the business community are genuine and the government will consider them,” Finance Minister Ishaq Dar said, while speaking to reporters.

Dar held a four-hour long meeting with representatives of industrialists and traders as they urged the government to immediately withdraw the 0.6% withholding tax on all banking transactions imposed on non-filers.

Read: Banking transactions: Take back the 0.6% withholding tax

“In case a solution is reached, the government may issue an ordinance for the time being,” Dar said.

“However, any permanent change will have to be approved by the Parliament,” the finance minister added.

A complete shutter-down strike was observed by traders on Tuesday in Faisalabad against the imposition of a 0.6 per cent withholding tax on bank transactions. Most traders’ associations abstained from business activity and all major bazaars across the city including Jhang Bazaar, Bhowana Bazaar, Aminpur Bazaar, Chiniot Bazaar, Kutchery Bazaar, Rail Bazaar, Karkhana Bazaar and Montgomery Bazaar presented a deserted look.

Read: Withholding tax: Traders observe shutter-down strike

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.