by Sohail Sarfaraz
ISLAMABAD: The talks between the government and traders on withholding tax on banking transactions of non-filers remained inconclusive with the government categorically conveying to traders that the levy would not be withdrawn.
Sources told Business Recorder here on Thursday that during a day-long negotiations with two different groups of traders held here on Thursday, no agreement was reached between the two sides.
A deadlock perished between government and traders’ community on Thursday. Another round of talks between traders and Finance Ministry/Federal Board of Revenue (FBR) would be held on Friday (October 9) at the FBR House. Chief Minister Punjab Shahbaz Sharif attended the first session at the Punjab House, which remained inconclusive. Later, the second session was chaired by Haroon Akhtar Khan, Special Assistant to Prime Minister on Revenue at the FBR House.
Finance Minister Ishaq Dar made it clear that the levy would not be withdrawn but the government would solve the genuine concerns of traders through mutual consultations.
The first major proposal of traders was to abolish the withholding tax on banking transactions of non-filers. Responding to this, the government side said that now it is a law under the Finance Act 2015 which cannot be withdrawn or rescinded. The second proposal was to defer the levy for a period of three months and finalisation of a package for traders during this period.
To this, the government side pleaded that they can continue to pay concessional rate of withholding tax till finalisation of a tax incentive package for the traders’ community. The third option of introducing fixed tax scheme for traders was also not finalised on Thursday, sources said.
Sources said the government has not accepted the demands of traders to suspend the levy for another three months or completely abolish the withholding tax. It has been decided that another round of talks between traders and authorities would be held on Friday (October 9). Both the groups presented their proposals to the Finance Ministry for consideration:
All Pakistan Anjuman-e-Tajraan (Khalid Pervez, Raza Babar and Atiq Mir Group) suggested that the traders are ready to file returns for expanding the tax net and increase number of filers of returns. This is subject to the condition that the FBR should simplify the system and end the discretionary powers of the tax officials.
A presidential ordinance be immediately issued to accept the assets declared during regularisation of their bank accounts. The amnesty scheme should allow collection of fixed amount of taxes on legalisation of assets. For this purpose, different slabs be introduced through the Ordinance.
The group pledged filing of returns by hundreds of thousands of traders across the country. The FBR should issue a simplified return form (one-page) for traders. New taxpayers should be exempted from audit for a period of three years provided they pay a 25 percent increased tax every year. It is suggested to exempt small traders form sales tax registration.
It is also suggested that NTN holders be exempted from payment of 0.3 percent withholding tax on banking transactions. The limit of Rs 50,000 be increased to Rs 100,000 per day for not charging 0.3 percent tax on cash withdrawal from banks.
The FBR should change its attitude towards traders and harassment should come to an end. All Pakistan Anjuman-e-Tajraan (Khawaja Shafiq, Naeem Mir and Ajmal Baloch Group) suggested that the declarations of all old and new filers should be accepted by FBR on regularisation of their bank accounts.
The FBR will not ask new filers to disclose source of income of past transactions. The new filers should be exempted from audit for a period of three years. WHT on banking instruments should be suspended till December 31. It is proposed that the maximum rate of turnover tax be fixed at 0.20 percent. The filers of income tax returns be exempted from 0.3 percent withholding tax on cash withdrawals from banks.
All tax concessions and exemptions available to the KPK province be restored for another three years. The group further proposed that a one-page simple return form be introduced for traders. The percentage of annual audit of filers be reduced from 7.5 percent to 3 percent. The group suggested that the period of keeping invoice record be reduced from five years to three years.
Source: Business Recorder