LAHORE - In a major move towards policy advocacy, the Lahore Chamber of Commerce & Industry on Thursday took up the issue of withholding tax on bank transactions with federal ministers, parliamentarians and key government departments.
LCCI President Sheikh Muhammad Arshad through a letter to MNA Pervez Malik, Chairman FBR Tariq Bajwa, Special Assistant to Prime Minister on Revenue Haroon Akhtar Khan, Federal Minister for Commerce Khurram Dastgir Khan, Federal Finance Minister Ishaq Dar, Federal Minister for Kashmir Affairs & Gilgit Baltistan Muhammad Barjees Tahir and Senator Raja Muhammad Zafar-ul-Haq, informed them of business community challenges particularly with reference to withholding tax on bank transactions.
As per LCCI proposals, LCCI President Sheikh Muhammad Arshad said that withholding tax on banking transactionss has created a tense situation which needs to be tackled through meaningful dialogue between the government and the business community.
He suggested that the filers should not be charged withholding tax at all in any case and non-filers should be required to pay withholding tax as final liability at the rate of 0.20% on cash withdrawal of more than 200,000/= per day only.
Sheikh Muhammad Arshad said that currently, the income of non-salaried individuals up to Rs.400,000/= is exempt from tax. He proposed that the threshold of income of non-salaried individuals should be enhanced to Rs.600,000 from 400,000/=.
Regarding Wealth Statement under section 116, he said that its filing should be made mandatory for all individual taxpayers where declared income is Rs.20,00,000 or more.
The LCCI President said that currently rate of Corporate Tax for Public/Private companies is 33% while this rate in countries like Afghanistan, Bangladesh, Bhutan, India,  Sri Lanka, Turkey and China is 20 percent, 27.5 percent, 30 percent, 30 percent, 28 percent, 20 percent and 25 percent respectively. He said that keeping in view the above Corporate Tax rate in Pakistan should be reduced to at least 25%.