KARACHI: The government has agreed to double the minimum limit of
daily banking transaction by non-filer liable to additional withholding tax to
Rs100,000 in the next budget, central bank governor said on Monday.
“The
finance ministry and the Federal Board of Revenue agreed to increase the
banking transaction threshold from the existing Rs50,000 per day to Rs100,000
for charging withholding tax in the upcoming budget of 2017/18,” said Ashraf
Mahmood Wathra, Governor of the State Bank of Pakistan (SBP).
The
government, in the budget 2015/16, introduced 0.6 percent withholding tax on
non-cash banking transaction of Rs50,000 per day, made by a non-filer of income
tax returns to bring them into the tax net. The rate was, however reduced to
0.4 percent, which is applicable till March 31.
Wathra,
at a meeting with the members of the Karachi Chamber of Commerce and Industry,
strongly rejected the demand of business community to review 100 percent cash
margin requirement on various imported items. The items were selected after
thorough deliberations, he added. “Instead of spending foreign exchange on import
of non-essential items there is need to spend (it) on import of capital goods.”
The
government recently bounded importers to deposit 100 percent foreign currency
value of imported items as a measure to reduce the ballooning trade
deficit.
SBP
governor said the saving from lower international oil prices was transferred to
the import of non-essential items.
On
a query raised by Siraj Kassam Teli, chairman of businessmen group related to
amnesty scheme for money held by Pakistanis abroad, he said a permanent amnesty
on bringing foreign exchange into the country is available. “Nobody will ask a
person to bring foreign exchange into Pakistan.”
He
said the Indonesian model of whitening black money emerged successful as the
country had a comprehensive database of individuals.
“Unfortunately,
Pakistan had no such database,” he added. “However, with the implementation of
OECD (Organisation for Economic Cooperation and Development) convention,
Pakistan would be able to have such information from 2018.”
SBP
governor said except in some refinancing schemes introduced by the central
bank, participation of businessmen generally remained lacklustre.
He,
however, expressed surprise over a substantial increase in loan under export
financing scheme available at three percent despite falling exports. “Nobody
knows where the money is going… either in the stock market or in the real
estate business,” he said.
Governor
Wathra also criticised the monopoly of some businessmen in the exports sector.
“New breed should come as old exporters have earned much money,” he said. “New
markets and techniques should be adopted to spur export growth.”
The
governor said the law and order situation has improved during the past three
years. The government has cut the tariffs of utilities for industry. “This has
resulted in a significant growth in private sector’s credit off-take.”
On
Export-Import Bank, Wathra said the SBP is coordinating with the finance
ministry and recently sought a technical assistance from the Asian Development
Bank. He said the negotiation is at an advance stage. The government published
an advertisement to appoint chief executive officer of the bank.
He
said formal bilateral trade between Iran and Pakistan will start with the
signing of a final draft. The SBP has also relaxed certain conditions on trade
with Afghanistan.
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