(November 02, 2020)
Chairman of National Business Group of FPCCI, President Pakistan Businessmen and Intellectuals Forum and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Monday said efforts of present and former governments has not succeeded to discourage cash economy, therefore, a new plan to promote the documented economy should be executed.
Taxpayers and tax collectors should be brought closer to reduce the volume of the cash economy which is increasing despite efforts, he said.
Mian Zahid Hussain said that amnesty schemes, withholding tax on transactions and high interest rates during 2019 has not worked and a good number of people still prefer to remain out of the documented economy.
Talking to the business community, the veteran business leader said that according to a report the people held 29 percent of the money outside banks in 2015 and now the ratio has jumped to 42 percent.
Repeated increase in withholding tax on bank transactions has not helped as many prefer to pay a higher tax than becoming part of the documented system which should be considered by the policymakers.
He noted that the business community prefer to keep local and foreign currency with them despite the risks involved which call for renewed efforts in the right direction.
Government can consider luring money to banks by offering incentives, online transactions should be promoted through different encouragements, digital infrastructure should be established and a ban could be imposed on keeping cash in lockers, he opined.
Such steps may discourage the tendency of millions of people to keep cash with them for business and other purposes which will be beneficial for the economy as it will reduce the volume of undocumented economy, he said.