Finance Minister Ishaq Dar has called a meeting of traders, representatives of chambers of commerce and industries, and concerned members of parliament regarding withholding tax on banking transactions on July 27.
An official source said the meeting was called as All Pakistan Traders Convention to be held today in Lahore is likely to reject the lowering of withholding tax (WHT) on cash withdrawal. The traders representatives are likely to demand its complete wavier as otherwise they will announce plans for country-wide protest movement and strike.
The source said that some of the key PML-N leaders wanted it complete withdrawal considering the resistance in the trading community. However, the finance ministry is opposing the idea considering a collection of about Rs 100 billion just from simple banking instruments.
The finance ministry presented it as an ingenious move to bring people in the tax net. However, the resistance shown by the traders have put the Q-Block in trouble as its withdrawal will make not only make achievement of current fiscal year’s tax collection target difficult but also lower the tax to GDP ratio.
The source said the government was still divided on the move, but the pressure exerted by the traders, especially in the urban Punjab, is unbearable for the ruling party, and it may finally decide to completely abolish the tax that may put Q-Block in a difficult position before the IMF.