While the business community has rejected the federal government decision to impose 0.6 percent levy on bank transactions exceeding Rs 50,000, trade and industrial associations' representatives are persuading the government to withdraw this tax to avoid any confrontation.
The representatives of these bodies have warned that if tax on all bank transactions is imposed forcefully by the government, it would not only hamper the trade and economic activities but would also tarnish the image of the government. The business community has rejected the unjust levy over bank transactions and asked the government to withdraw the tax immediately, they added. Lahore Chamber of Commerce & Industry (LCCI) President Ijaz A Mumtaz on Wednesday said the government would have to find out an amicable way to the issue of withholding tax on bank transactions in order to ensure a business-friendly atmosphere in the country.
"The economy is well on the track and cannot afford any confrontation between the government and the business community which is backbone of the economy," Mumtaz said, adding: "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.
Ijaz A Mumtaz said that though formation of a committee and cut in withholding tax was a step in right direction but business community was yet not satisfied and wanted complete withdrawal of withholding tax. The LCCI President said that a number of trade & industrial associations had approached the LCCI and informed that imposition of tax on all banking transactions had caused unrest and put the interests of business community on stake. He said imposition of that tax would force business community to conduct its monetary transactions in cash that would promote the undocumented economy.
Ijaz A Mumtaz said all business-related decisions should be taken in consultation with the stakeholders as was being done in the developed countries. He said Federal Finance Minister would be asked to take all trade and industry related decision in consultation with the business community which is backbone of the economy. He said the Lahore Chamber advocated the broadening of tax net but all measures should be taken in consultation with the stakeholders.
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