Small savers have been forced to pay 10pc at-source withholding tax deduction on profit since 2004, on their savings courtesy the government of then-Prime Minister Shaukat Aziz.
The elderly, mostly widows and pensioners, receive a slightly higher rate of 14.04pc on ‘Bahbood Savings Certificates’. In the first week of every month, NSS offices are packed with the old and infirm, men and women, waiting for their turn to receive the pittance from which to meet their expenses. As for the government, the National Savings Scheme (NSS) is its biggest source of its non-bank borrowing.
Lack of investment avenues for small savers draws many to NSS since they have few alternatives. Conventional prize bond schemes give no guarantee of a return and have come to become the cheapest source of money laundering for people with ill-gotten wealth.
Some feel safe to keep their money in banks, despite the fact that most banks offer a return of 6pc on the average balance in the customer’s savings account.
