Withholding tax on bank transactions illegal: PEWOctober 14, 2015
KARACHI: The Pakistan Economy Watch (PEW) on Thursday said the issue of withholding tax on bank transactions has become a very complicated as both sides have stick to their guns.
This tax is illegal as well as unethical and violation of the basic rights of banked population, said Dr. Murtaza Mughal, President PEW in a statement issued from Islamabad. Government should not punish masses and the business community for the failure of FBR to broaden tax base, said said Dr. Murtaza Mughal, President PEW.
The decision to slap additional WHT on bank transaction is extortion which is encouraging underground economy therefore the deadlock between government and traders must be resolved, he added. He said that income and consumption is taxed around the world but here government has found a novel way to milk masses which is not acceptable.
“Some banks are taking the benefit from the prevailing situation to get undue advantage from account holders which is illegal, but regulator prefer to remain silent. WHT on bank transactions will in no way bring rich and super rich in the tax net and will not promote documentation of the economy,” he noted.
Dr. Murtaza said that the government and FBR had repeatedly claimed to have details of 3.2 million rich people evading taxes, but they had not touched even a single person among them.
Taxing these influential would help government raise additional Rs one billion while tax on bank transaction will not help government raise one-third of it.