The country's trade union has warned that it will stop bank transactions after the Eid if the government fails to drop the withholding tax. The warning came from the All Pakistan Anjuman-e-Tajiran which has rejected an agreement reducing the tax from 0.6 to 0.3 percent for three months. Chairman Abdul Razzaq Bubur made it clear on Saturday that those having signing the agreement with Federal Finance Minister Ishaq Dar were no longer the union's representatives but those of the government.
"The transaction tax is discouraged all over the world since it does not capture the real income, resulting in an increase in the cost of doing business. Because of this, traders are making payments in hard cash," He said. "People are afraid of becoming tax registered." He has demanded reforming the entire income tax law. "Till the withdrawal of the tax, the trade community will not offer any support to the government and no tax official will be allowed to enter any market," he warned. Last week traders shut down all their businesses in the Punjab and staged a squeal of protests.