KARACHI: The Finance Ministry has agreed to abolish withholding tax on cash withdrawal by tax return filers, this provision would be added in the upcoming supplementary Finance Bill on January 23, 2019.
Acting President Karachi Chamber of Commerce & Industry Khurram Shahzad, while referring to a meeting of KCCI’s delegation with Minister of State for Revenue Hammad Azhar held in Islamabad, said that KCCI’s recommendations for the forthcoming Finance Bill to be announced on Jan 23 were extensively discussed during the said meeting in which the Minister, while assuring to incorporate numerous suggestions, agreed to abolish withholding tax (WHT) on cash withdrawal from bank accounts by filers with a view to encourage ease of doing business.
Pakistan is 144th on the world ease of doing business index. Industry is faced with a number of bureacratic hurdles, over regulations and excessive taxation in addition to higher cost of doing business.
Such a scenario has taken toll on exports, which have been on downward trajectory since long. Moreover, instead of business expansion, overall industry is downsizing and industrial units are shutting down.
Finance Minister Asad Umar has said that improving ease of doing business is the top priority of PTI government.
In a statement issued, the Acting President KCCI said that besides himself, the Karachi Chamber’s delegation comprised of Vice Chairman BMG & Former President KCCI Zubair Motiwala, Haroon Farooki, Anjum Nisar, Former President Haroon Agar and Former Senior Vice President Ibrahim Kasumbi who discussed numerous issues being faced by the business and industrial community.
He said that the Minister further agreed to withdraw Sales Tax & WHT on sales of used/second hand Capital goods/ Textile machinery by Manufacturers/ Local traders and also assured that Final Tax Regime (FTR) for Commercial Importers will be restored in the upcoming Finance Bill.
Khurram Shahzad further informed that the State Minister further agreed to withdraw notices of mandatory Audits under section 214D to late filers of returns.
“It was agreed that the powers under Sections 37, 37A, 37B, 38, 40, 40B of Sales Tax Act will only be exercised only after prior approval of Member FBR and above. Any such actions will be conducted in the presence of representative of Relevant Chamber / Association”, he added.
He said that it was agreed by Finance Minister Asad Umer that the Taxes and Penalty deposited/remitted for Declarations filed under Amnesty scheme within the due date, but payment received after the due date due to technical reasons will be accepted and declaration will be considered as valid for Amnesty. State Minister agreed to provide this in the mini budget.
Moreover, it was agreed in principle to withdraw the exemption to Large Import Houses under Section 148 I – Sub Section 7, Sub Clause D of Income Tax Ordinance, providing Exemption of 6 percent WHT and other levies, Acting President said.
It has been agreed that the ceiling for Association of Persons (AOPs) and Individuals to be treated as With-holding agents will be enhanced to amount of turnover exceeding Rs.200 million. Status of individuals having turnover below Rs.200 million will be restored as was prior to 2013, he added.
Acting President KCCI said that all the proposals given by KCCI were in the overall interest of the economy, which would remove distortions in tax regime, enhance the Ease of Doing Business (EODB) and support increase in revenues.
He hoped that these proposals will be implemented as agreed during meetings with State Minster and the Finance Minister.