ISLAMABAD: The small traders on Monday backtracked from their agreement with the government on the reduced rate of withholding tax on banking transactions and announced to go for a shutter down strike on August 1 if the government did not abolish this tax in totality. The government announced to expand the negotiating team by inserting more representatives into the already-constituted 19-member committee and holding the next round of talks on Tuesday (today) here in Islamabad in order to resolve the ‘genuine problems’ of tax filers. Soon after inconclusive hours-long parleys with the government team including Adviser to PM on Revenues, Haroon Akhtar, Parliamentary Secretary for Finance Rana Afzal, Chairman FBR Tariq Bajwa, MNA Mian Abdul Manan and MNA Pervez Malik, All Pakistan Anjuman-e-Tajran (APAT) announced during a news conference at the FBR headquarter that they would observe a shutter down strike on August 1 against the imposition of the WHT on banking transactions. They also announced that they would not participate in any round of talks and would sit with the government team only when this tax was withdrawn. Finance Minister Ishaq Dar did not participate in parleys with the business community on Monday but reached the FBR to get the latest update on the the negotiation process. When the traders had given a shutter down strike call, Finance Minister Ishaq Dar came down from the chairman FBR’s office and told the media that the government will continue the dialogue process with the expanded committee in order to find out a solution of genuine grievances of those who wanted to contribute to the national kitty. The minister said that they wanted to broaden the tax net by overcoming leakages and it provided a golden opportunity to both sides to solve irritating problems. “There is a need to resolve all problems by jointly sitting here in Islamabad,” he maintained. He reminded that it was another difficult financial year for Pakistan where the government would have to cater to the requirements of recent flash floods and for resettlement of IDPs in the aftermath of Zarb-e-Azb. “The government will have to spend Rs100 billion on the resettlement of IDPs and other requirements,” he added. When his attention was drawn towards the strike call given by the traders, the minister said that the government would convince them.Adviser to the PM on Revenues Haroon Akhtar told the media that the dialogue process would continue to remove the irritants for those who possessed genuine concerns for coming into the tax net and the finance minister would give them an assurance that their genuine problems would be resolved by simplifying the rules and procedures. Chairman FBR Tariq Bajwa told the business community that there was no 0.3 percent reduced withholding tax on banking transactions who were return filers. This tax is meant to penalise the non-filers, he added. Earlier, the government and business community had signed an agreement to reduce the withholding tax rate to 0.3 percent from 0.6 percent for three months till September 30, 2015 and the government made this agreement effective by promulgating a presidential ordinance. However, the leadership of the trading community could not convince their members all over the country and differences also emerged within their ranks, so different trade bodies had given a shutter down strike for August 1 and August 5 separately. In this context, the finance minister had invited the representatives of the business and trading community for a new round of talks to devise a strategy to implement the signed agreement but it took a new turn when the APAT backtracked on its signed agreement and demanded of the government to abolish this tax in totality. In return, they promised the government to support it in undertaking market surveys and bringing in new assessees into the tax net in the range of 100,000 to 2.5 million over the three-year National Tax Reforms programme. Earlier, during the second session of the parleys, the Secretary General of APAT, Naeem Mir, told the gathering of the business community it was difficult for them on the political front to accept even the reduced rate of WHT. It is matter of our political survival as the trading community has rejected the imposition of the WHT in totality, he added. Mian Abdul Manan, MNA, said on the occasion that there was no traders’ leader sitting in this conference room who did not file his return. “So there is a need to ascertain why we are fighting others’ war who prefer to remain out of the tax net,” he asked. He said the government could not withdraw this tax through just an announcement because it had become a law of the land approved by parliament and then rate was reduced through a presidential ordinance. “We will present a summary to the PM and the finance minister on demands of the business community and then the leadership will take a decision on it,” he added. However, representatives of Islamabad Chamber of Commerce and Industry (ICCI) asked the government to simplify the tax procedures but simultaneously advised the trading community to pay their taxes to run the country. The trading representatives from all over the country, however, extended all-out opposition to this tax and small businessmen hailing from KP demanded the government to provide them relief being a frontline state and rendering sacrifices in the ongoing war against terror.
