ISLAMABAD: The local business community has called upon the government to immediately withdraw the imposition of 0.6 percent withholding tax from July 1, 2015 on all banking transactions for non-filers.
It would discourage banking transactions, promote non-banking and cash transactions and would lead to harmful consequences for the economy, said Muzzamil Hussain Sabri, President, Islamabad Chamber of Commerce and Industry (ICCI).
The government has imposed advance adjustable income tax at 0.6% on all banking transactions of over Rs 50, 000 in a day for non- filers in a bid to compel them to become filers.
He thought the increased reliance of the government on withholding taxes could become counterproductive as it would further incentivize non-filers to conduct cash transactions and promote informal economy in the country.
He said the imposition of this tax would also give rise to inflation as non-filers would pass on its burden to the common man who will have to pay high prices on purchases.
He said that almost the whole business community of the country has strongly opposed this new tax and government should seriously consider its urgent withdrawal to avoid any disturbance to the business and economic activities.
Muzzamil Hussain Sabri said the levy of the tax on non-filers would also affect the objective of financial inclusion.
