Squeezing savers

The National Savings centres have started deducting 35 per cent withholding tax from ‘non-filers’. Implementing this policy will negatively impact deposits and might further discourage small investors from putting their money into savings schemes. Meanwhile, the quality of services at the National Savings centres is pathetic. The staff’s behaviour towards elderly people in particular, is quite poor. Under the present scenario, it is the senior citizens, the pensioners, the widows and housewives that will be most affected. Most of them do not have any other source of extra income so they are not liable to pay income tax.

But they appear to have been classified as non-filers, forcing them to pay more tax. This is quite unjust and impacts those, such as widows and pensioners, already struggling to make ends meet amidst inflation and hefty utility bills. Moreover, this policy will likely have an adverse impact on National Savings as it is already struggling to retain its existing investment portfolio. The financial authorities should intervene before savings drop dramatically in a country that already has a woeful savings-to-GDP ratio.

Dr Alfred Charles

Karachi