Tax on savings

The government has introduced a savings schemes with higher profits for the welfare of widows, shuhada families, senior citizens and pensioners with ten percent tax on the profit. Tax on profits of other savings schemes are deducted at source but the aforesaid tax is to be paid by the recipients of the profit through some lengthy procedure not known to most.

The question is: why burden the profit recipients to go through the hassle of tax payment when the government can authorise only that much profit which does not require tax deduction? Also, the logic of paying profit from the government treasury and then deducting ten percent through a valuable time and material-consuming process, without net increase in government revenue, needs examination. It is hoped that ten percent tax on the profits of the savings schemes designed for the welfare of widows, shuhada families, senior citizens and pensioners will be abolished in Naya Pakistan to save the recipients from the hassle of tax payment and possible questioning by tax officials.

M Akram Niazi

Rawalpindi