KARACHI: The Union of Small and Medium Enterprises (UNISAME) has voiced its opposition to reports suggesting that the government is considering the re-imposition of withholding tax on cash withdrawals.
While this tax previously served as a significant source of revenue for the Federal Board of Revenue (FBR) and played a role in expanding the tax base, UNISAME argues against its legality and potential burdens on non-compliant individuals.
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President of UNISAME, Zulfikar Thaver, highlighted the distinction between two types of non-filers: those whose income falls below taxable thresholds, making them exempt from tax liability, and those deliberately evading taxes by engaging in unlawful activities such as smuggling, hoarding, black marketing, and profiteering.
Thaver emphasized that the focus should be on addressing and holding accountable those involved in illegal practices, rather than penalizing underprivileged individuals who are struggling to make ends meet and are not legally obligated to pay taxes due to their low income levels.
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UNISAME Council members express concern over the government’s contemplation of imposing taxes on bank withdrawals once again. They argue that such a move would amount to double taxation. The funds deposited in bank accounts are derived from various sources, including dividends, profits on certificates and savings, and returns on investments, all of which have already been subjected to withholding taxes.
The issue at hand should not revolve around the division between filers and non-filers and should not be unnecessarily amplified. Instead, the focus should be on addressing the non-filers involved in unlawful activities such as smuggling, black market operations, speculation, money laundering, and the parallel foreign currency economy. UNISAME believes that strict actions should be taken against these individuals to combat these illegal practices effectively.
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UNISAME urges the government to reconsider the potential re-imposition of withholding tax on cash withdrawals. Instead, they advocate for a fair and just taxation system that targets illicit economic activities while supporting the growth and development of small and medium enterprises.
By taking measures to curb unlawful practices and providing necessary support to businesses, the government can foster an environment of transparency, economic stability, and sustainable growth.
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