The federal government’s decision to charge 0.6 per cent withholding tax on each bank transaction of Rs100,000 on Tuesday triggered protests by traders in different towns and cities of the country. Incensed traders staged noisy demonstrations to protest against implementation of the tax with many markets closed as part of the agitation.Although levied on non-filers, the protesting traders argued that even the tax filers would not be spared. They have warned of extending the protest if the decision is not withdrawn. The government should engage the traders and address their reservations by creating awareness about the utility of filing tax returns. The government should not impose such taxes in an arbitrary style. Traders argue that the new tax is totally unjustified and anti-business. Despite assurances from the government that the new tax penalty is being imposed only on non-filers of tax returns, traders have rejected this new tax. A shutter down strike was observed across the country on the call of respective traders’ representative bodies. So far, a deadlock persists over the issue between the government and traders, despite their meeting with Finance Minister Ishaq Dar.It should be remembered that this particular tax is applicable to those who refuse to pay taxes otherwise, or who are outside the traditional tax net. And it should not be forgotten that expanding tax collection was one of PML-N’s core campaign promises. Yet in the two years of its third term in power, the ruling party has overseen a rather visible dip in tax earnings. Hence the resort to withholding tax of this nature. Critics are right, to an extent, that this measure will discourage banking transactions, pushing people more towards cash transactions. It is also natural for opposition parties to hop on board, especially since it might not be very easy to separate defaulters from payers.Instead of resorting to punitive measures, the government needs to reform its tax-related regime and look for more acceptable measures to bring people into the tax net. It should first and foremost target the big fish that evade taxes and earn hefty profits without paying a single penny to the national exchequer. While the government goes about taming these traders, it must also make sure that those far closer to it, in the halls of power, also start paying their due taxes. It was because of this refusal to pay, after all, that unorthodox measures had to be resorted to.
pk.shafaqna.com
