KARACHI: The government has agreed to abolish withholding tax on cash withdrawal from bank accounts by filers in order to encourage ease of doing business.
A statement issued on Friday by Karachi Chamber of Commerce and Industry (KCCI), said that a delegation of the chamber met Minister of State for Revenue Hammad Azhar in Islamabad.
The meeting discussed KCCI’s recommendations for the forthcoming Finance Bill to be announced on January 23.
At the meeting 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.
Acting President KCCI Khurram Shahzad 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.
This may please be included in the Mini Budget which was also agreed by the state minister.
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 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.