Business community demands withdrawal of withholding tax

LAHORE: Lahore Chamber of Commerce & Industry has demanded of the Federal Board of Revenue (FBR) to withdraw withholding tax on banking transactions and discretionary powers to the tax officials as these issues are creating panic within the business community.

The demand was raised at a trader’s convention under the umbrella of the Lahore Chamber of Commerce & Industry. The LCCI President Malik Tahir Javed, Senior Vice President Khawaja Khawar Rasheed, Amjad Ali Jawa, Nasir Hameed Khan, Tahir Manzoor Chaudhry, Fahim ur Rehman Saigol, Naeem Hanif, Muhammad Bashir and representatives of trade and industrial associations spoke on the occasion.

The LCCI President said that unjustified levies like withholding tax are discouraging the new taxpayers and obstructing the expansion of tax net. He said that Federal Board of Revenue Chairman and Senate Standing Committee on Finance and Revenue Chairman should take immediate notice of this longstanding issue that is causing trust deficit between the business community and the government.

“New strategy will be evolved if these issues are not resolved by the end of this month”, participants of the conventions said.

The participants of the convention said that Section 40 & 38-B are being badly used by the FBR staff. They are visiting business premises to harass the business community. They not only take shocking measures to raise illegal tax demands without providing any supporting document but also confiscate all available records with them. The participants of the meeting were of the view that teams from tax department should visit the markets, if indispensable, but they should immediately stop harassing business community. They said that if there is an urgent need for stock taking and ascertaining the Sales Tax liability of any particular business unit, the FBR officials should take association concerned or the Lahore Chamber on board.

They said that indirect taxes are being removed gradually throughout the world however in Pakistan these contribute to around 60 per cent to the revenue despite the fact that expenses on this practice are higher than the collections.

All the participants said that FBR should stop harassing filers as non-filers and ones outside the tax net are not accounted for at all which discourages businesses to come into the tax net. Registered businesses are required to comply with various departments involving a lot of financial and time resources whereas unregistered businesses are free from all such hassles.

They added that out of the 3.5 million registered taxpayers only 1 million file returns. They expressed that the government should take measures to ensure that the remaining 2.5 million contribute towards taxes. It was also noted that the government claims to be a facilitator however that does not seem to be the case at all.

They said that the attachment of bank account for recovery of outstanding dues is slowing business growth and also damaging the business-friendly image of the government. The bank accounts should not be attached without prior notice to the taxpayer and after seeking approval in writing of the commissioner in the light of reply submitted by the taxpayer. Further, the recovery should only be carried out after the decision of the Tribunal and not before that.

Earlier, participants of the convention staged a protest against withholding tax and misuse of discretionary powers. They hoped that FBR will take into consideration the issues raised, in the larger interest of the trade and industry.

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