WHT on bank transactions: APBF endorses traders’ stance

While the traders have announced shutter down strike on August 01 (Saturday), the All Pakistan Business Forum (APBF) has endorsed their stance on 0.3% WHT on banking transaction, persuading the government to withdraw this tax to avoid any confrontation.

President All Pakistan Business Forum Ibrahim Qureshi, said that the government, instead of creating uncertainty, should announce business friendly policies to attract the investment in the country. The government should understand that protests and strikes always hit the economic activities hard in an atmosphere of terrorism, he said.

He added that the APBF was with all the trade and industrial associations against this imposition of tax on bank transactions. He further said that all business-related decisions should be taken in consultation with the stakeholders as being done in the developed countries. He asked the finance minister to take all trade and industry related decisions in consultation with the business community which is the backbone of the economy. He also criticised the un-adjustable 8% withholding tax on revenue of service sector, putting the sustainability of this sector at stake in a country where cost of doing business is already very high.

Ibrahim Qureshi said that with the implementation of this law, the government has actually discouraged new start-ups and future investments in the service sector. It is a principle that new businesses are not taxed when they are in their infancy allover world.

“The whole service sector, consisting of information technology, advertising, marketing, event management, telecom and freight forwarding and clearing, which contribute over 53 per cent to the GDP and facilitate economy at large, will be collapsed just in few months, jacking up both the inflation and unemployment rate,” he said.

“The whole service sector, consisting of information technology, advertising, marketing, event management, telecom and freight forwarding and clearing, which contribute over 53 per cent to the GDP and facilitate economy at large, will be collapsed just in few months, jacking up both the inflation and unemployment rate.

He termed the eight percent un-adjustable withholding tax on revenue implemented from July 1, 2015, a draconian tax law which is aimed at destroying the service sector. Though broadening of tax net is need of the hour but the government would have to find out new ways to bring the untaxed sectors into the tax net. He said measures like imposition of withholding tax on bank transactions would not render any service to the economy as it has been observed that tax collection machinery has no authentic data to make difference between filers and non-filers.

Ibrahim Qureshi urged the government to announced incentives for the filers, exempting them from 0.3% withholding tax imposed on all banking transactions, as it would encourage non-filers to come into the tax net and government would achieve its all targets aimed at expansion of tax net. There should be no withholding tax for the filers as they are already performing their national obligation with honesty, he said. This is a double taxation which is bound to hit the trade and industry hard. He said the tax would force business community to conduct its monetary transactions in cash.