Call to resolve withholding tax issue amicably

LAHORE: A traders’ group at the Lahore Chamber of Commerce and Industry (LCCI), announcing full support to the strike call given by the traders against 0.3 percent withholding tax imposed on all the banking transactions, has urged the government to resolve this issue wisely and amicably with the consultation of the traders.
The traders group’s President Khalid Usman, Deputy Secretary Muhammad Ejaz Tanveer and Abdul Wadood Alvi on Wednesday stated that the constitution of committees by the Federal Board of Revenue (FBR) in the name of facilitating the traders would not work. “The government should pay attention to the real cause of concern.
This kind of indirect tax will have a multiplied impact on the transactions. It is hampering the banking transactions and using formal money transactions’ channels,” they added. They said this tax would not only decrease the economic activity but also encourage the people to handle all their transactions in cash to avoid taxes. It will also hamper the government’s efforts of expanding the tax net.
They said it was also not understandable that the government had levied this tax simultaneously on filers and non-filers. So those who are registered and filing their tax returns and contributing to the national exchequers have to face this harsh tax as well.
They claimed the banks were deducting this tax from filers and non-filers alike with the suggestion that filers could claim input later while everybody knew how difficult it was to claim the refunds from the FBR.
They said this tax, which would discourage the use of banking channels, also hamper the business of largest service sector i.e. banking sector thus leading to the loss of revenue to the national exchequer which was collected on banking services.
They said the government should understand that protests and strikes always hit the economic activities hard therefore this tax should be withdrawn immediately in the larger interest of the economy. They said their group stood with all the trade and industrial associations against this imposition of tax on the bank transactions.
They said the traders had high hopes with the meeting convened by the federal finance minister to discuss the issue with all the stakeholders and traders of this tax and its negative impact on the economy and urged an immediate withdrawal of this tax. The trader leaders said the FBR bigwigs instead of suggesting such indirect taxes should mobilise its officers and officials to expand the tax net by identifying the potential areas.
They should suggest that direct taxes as indirect taxes also enhanced the possibilities of underhand deals. The government should take all the trade and industry related decisions in consultation with the business community which is the backbone of the economy. ‘Nobody is against paying of taxes or expansion of tax net but these should be done in a rational manner,’ Khalid Usman and Muhammad Ejaz Tanveer concluded.