The traders across the country held a successful shutter-down strike to protest against the imposition of withholding tax on bank transactions. Most of the markets in major cities and towns remained closed despite differences among the trade bodies on the schedule of the strike. On another note, the government has offered various incentives to the non-filers to bring them into the tax net. The newly registered taxpayers will be exempted from audit for three years if they would agree to declare their assets and income. The government is also considering introducing a tax amnesty scheme for non-filers, but the traders look these steps as an attempt to divide the business community.
The traders have shown unity against the government attempt to document their income and assets by observing the countrywide strike. No doubt broadening of the tax net and documentation of the economy remained major challenges for the successive governments in Islamabad. In principle, the government has the every right to impose any tax, but in practical, its tax policy is always marred by flaws and frictions and it hits snags at the implementation stage. It is really crazy to implement right decision through wrong methods and this has been routinely happened in Pakistan since its inception. During the Ziaul Haq’s era, the Zakat ordinance was issued and banks were told to deduct Zakat from every account without realizing that not all the Pakistanis are Muslims and not all the Muslims are liable to pay Zakat. There are certain conditions for the deduction of Zakat, but the banks were told to deduct Zakat even if the money is deposited a day earlier in an account. The government has imposed TV fees on every electricity connection and TV fee is collected even if the connection is in a graveyard.
Thousands of Pakistanis are working abroad and send billions of dollars remittances and they are also made liable to pay withholding tax on bank transactions. The government is administrating wrong pill to cure the patient. The Federal Board of Revenue has started an initiative to purge the department of corrupt elements, but this is a process and not a real-time solution. There are businessmen who earn billions of rupees but do not pay tax and there are government officials who lead luxury life much beyond their sources of income at the cost of taxpayers’ money. Unless a system of check and balance is enforced, blind steps from the government would not serve any purpose.