The Federal Board of Revenue (FBR) is going to waive off withholding tax on the withdrawal of remittances by the overseas Pakistanis to their non-filer family members.
The new decision maintains that money sent by the overseas Pakistanis through banking channels will not be subjected to tax. In this regard, the board has begun chalking out a new policy. The new policy will waive the withholding tax otherwise applicable on the withdrawal of the money from banks that is sent by the overseas Pakistanis to their non-filer family members.
Reportedly, the board has requested the relevant departments to give recommendations on the new policy. A draft of the new policy is going to be completed by the next week.
Presently, income tax filers have to pay 0.3 percent withholding tax while non-filers are paying 0.6 percent tax on the remittance withdrawal from the banks. However, the Prime Minister Office has directed the FBR to review the current policy on withholding tax on the withdrawal of remittances.
According to the letter, the FBR will frame a policy within days and present it to the PM. The letter mentions that the overseas Pakistanis have complained of difficulties in the transfer of remittances from the banking channels.
Banks deduct additional taxes on the withdrawal of remittances by the recipient family members given they do not have taxable income otherwise and hence, do not file the returns.
The letter also stated that the low bank exchange rate is causing a loss for the recipients of the remittances. It stated the PM’s directions to the authorities that the said issue should be resolved within 21 days via a comprehensive strategy.