LAHORE/Karachi - An effective and significant but partial shutter down was observed in city of Lahore on Tuesday against imposition of withholding tax on banking transactions by the federal government, as major wholesale markets were completely closed while few retail markets were partially open.

In the provincial capital, traders of Shahalam Market, Urdu Bazaar, Brandreth Road, Landa Bazaar, Biden Road, Shah Alam Market, Suha bazaar Jewellery market, Liberty Market, Hafeez Centre, Hall Road, Cantonment Board and Mcload Road, Badami Bagh markets kept their businesses shut, while retail markets of Ichhra, Anarkali Bazaar, Karim Block market, Township bazaar and Mozang Bazaar remained partially opened.

Market sources said that traders failed to adopt a unified protest strategy after their two major bodies remained divided over shutter down against the imposition of 0.6 per cent advance adjustable tax on banking transactions worth over Rs50,000. While the All Pakistan Anjuman-i-Tajiran President Khalid Pervaiz and its Lahore chapter president Maqsood Butt announced a strike, Anjuman-i-Tajiran Pakistan chief Ashraf Bhatti decided not to be part of the protest, pinning his hopes on a meeting called by the finance minister to be attended by FBR officials and traders to sort out the issue within a couple of days.

The traders said that the government must drop the decision and in case the tax is not withdrawn, there will be a complete shutter-down strike all over the country. They, critising Finance Minister Ishaq Dar, said that withholding tax deduction is a serious blow to entire business activities and depositors are facing difficulties.

They said that from July 1 the tax has been implemented and under this every transaction of Rs 100,000, banks deduct Rs600. Because of this, the traders are making payments in hard cash.

They said that if tax on all bank transactions is imposed forcefully, it would not only hamper the trade and economic activities but would also tarnish the image of the government. He said that imposition of this tax would force business community to conduct its monetary transactions in cash that would promote the undocumented economy.

APAT general secretary Naeem Mir demanded the federal government to refrain from imposing this withholding tax and work towards providing relief to the industry and ultimately to the common man. Statistics show that only 791,000 individuals filed their tax returns in FY14, out of a population of 180 million people in Pakistan. This shows a really dismal picture, however it does not mean that the government can flog the poor man to pay for the rich man’s offenses.

In Karachi, President FPCCI Mian Muhammad Adrees has drawn the attention of the Prime Minister Mian Nawaz Sharif and Finance Minister Senator Ishaq Dar towards the agitations of business community all over Pakistan against 0.6pc WHT on every banking transaction.

In statement, he said that it is surprising that the banking sector has not yet been provided the list of non-filers to whom they have to charge 0.6pc. He also said that FBR’s data in this regards is also not updated.

He said that the banking sector is deducting 0.6pc WHT from all customers; the bank officials just look at the amount of banking instrument and which they found above Rs 50,000 they simply deduct 0.6pc WHT irrespective of that the customer is tax-filer or non-filer. He said that the FBR would have made arrangements with banks and share with them the updated data of filers and non-filers prior to impose such tax.

Such type of taxes are not advisable for low income economies like our country where the per capita income is around $1300 which ultimately if converted in Pak Rupee will reveal that it is even lower the minimum salary scale of the government which is Rs.12,000 per month.

He pointed out that the volume of banking transaction of over about Rs. 6 trillion annually should not be linked to all non-filers which also include the transactions of tax-filers, widows, pensioners, lower cadre employees and other poorest people of the society. In this scenario the banking deposits will also be reduced as the people will keep their deposit either in hard cash or in the shape of gold to avoid tax.

Mian Adrees regretted that the tax payers all over the world always honoured but in Pakistan the tax payers are being victimised. He emphasised the need of broadening the tax net which is the ultimate solution for enhancing tax revenue to exchequer rather the FBR is putting pressure on the existing tax payers who are already under burdened of heavy tax rates.

He urged the Prime Minister Mian Nawaz Sharif and Finance Minister Sanator Ishaq Dar to withdraw tax on banking transaction because it would hamper the business activities which will consequently reduce our exports.