KARACHI: The 0.6% withholding tax (WHT) across all banking transactions valued at over Rs50,000 is playing on everyone’s minds.
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) president has strongly urged for an immediate withdrawal.
Mian Muhammad Adrees, the FPCCI chief, has drawn the attention of Prime Minister Mian Nawaz Sharif and Finance Minister Ishaq Dar towards the agitations of the country’s entire business community against the withholding tax.
“It is surprising that the banking sector has not yet been provided the list of non-filers to whom they have to charge 0.6%,” he stated. He also said that the Federal Board of Revenue’s (FBR) data is also not updated.
Adrees said the banking sector is deducting 0.6% WHT from all customers; bank officials only look at the amount of banking instrument and if the amount is over Rs50,000, they simply deduct 0.6% WHT irrespective of the customer being a tax-filer or a non-filer.
He said that the FBR should have made arrangements with banks and shared with them the updated data of filers and non-filers prior to the imposition of such tax.
“Such type of taxes are not advisable for low income economies like our country, where the per capita income is around $1,300, even lower than the minimum salary scale of the government,” he said.
He pointed out that the volume of banking transactions of over Rs6 trillion annually should not be linked to all non-filers which also includes transactions of tax-filers, widows, pensioners, lower cadre employees and other poor people of the society.
In this scenario, he added, the banking deposits will also be reduced as the people will keep their deposit either in hard cash or in shape of gold to avoid tax.