Government must reconsider eight percent withholding tax on turnover of the services sector having 53 percent share in GDP lest it falls apart hurting international trade and fanning unemployment, a business leader said Monday.
Tax should always be on income and not on the revenue which is against the philosophy of the taxation as some companies have large turnover but small profits while others have small turnover but enjoy windfall, said President Pakistan Businessmen and Intellectuals Forum (PBIF) and former provincial minister Mian Zahid Hussain.
Talking to a delegation led by Chairman of Pakistan International Freight Forwarders Association (PIFFA) Asim Sayeed Khan, he said that the tax seems unnatural which will hurt imports, exports, revenue generation and job situation.
Mian Zahid Hussain said that the controversial taxation has been hurting sectors like IT, certification, public relations, media management, advertising, marketing, telecom, ISPs, clearing agents, fleet operators, couriers, security providers, outsourcers and software developers etc. Services sector is hard pressed by the development pushing many to close their businesses which will discourage investment in the critical sector paving way for its breakdown, he observed.
Mian Zahid asked the Finance Minister to find a solution to the issue which is acceptable to all the stakeholders.
At the occasion, Asif Sayeed Khan said that tax measures will increase cost of doing business and make services costly which is not acceptable.
Khan said that we have been meeting top officials to apprise them of problems but to no avail which has left us with no option but to turn to the last option of indefinite strike from Sept 01. He said that government would be sole responsible for all the economic losses during the strike.
