In the wake of Federal Board of Revenue’s (FBR) announcement to examine bank accounts with balances of over Rs. 0.5 million, a section of panicked bank customers are withdrawing their money from bank accounts to avoid any possible inquiry and registration from the tax authority.
These account holders are withdrawing their money from their personal bank accounts, including local and foreign currency accounts, since the announcement made by the tax authority, bankers informed ProPakistani.
“Customers with multiple accounts at my branch are closing down bank accounts and retaining just a single account with a deposit of less than Rs. 0.5 million”, a branch manager of an Islamic bank told ProPakistani.
“Not only have our old customers withdrawn their deposits, new customers are also not opening up accounts due to fear of the tax authority”, he added on the condition of anonymity. “It is very difficult to meet a monthly target of deposits mobilization for the branch located in Gulistan-e-Johar (Karachi), which maintains accounts of middle-class salaried and self-employed persons.”
People at large are afraid of the tax authority because of its announcements and the measures they’ve employed. Some customers believe once you come under the radar of FBR, things will be a quagmire and become difficult to handle.
Bankers are of the view that customers who hide their money in the banks accounts created in the name of their wives, kids, and servants are more active in withdrawing their money whereas those having accounts of foreign currency either withdraw their deposits or transfer the money in the lockers, or exchange into the local currency.
At the end of the day, the withdrawal of the deposits by the customers will hit banks and their reserves. This phenomenon may adversely affect the banking system in long-run as the public pulls out their money from the banking system. It’ll be interesting to see the state of reserves for commercial banks in the next quarter of financial results.
According to bankers, the number of inquiries related to retaining deposits in banks accounts or withdrawing them from banks branches are increasing.
They are convincing their customers that the tax authority will not take any stern action against them if required documents, particularly the proof of income source and money trail, are documented in the banks. “Upon our efforts, some of the customers avoid withdrawal of their bank deposits while some of them are adamant to pull out their money from banks”, they added.
Reports said that banks had provided the data of account holders to FBR holding more than Rs. 5 million recently and the turn of account holders having a bank balance of Rs. 0.5 million will come in later months
According to the State Bank of Pakistan (SBP), the deposits of the banking industry stand at over Rs. 14 trillion.
Deposits maintained by the private sector (mainly corporations) and self-employed customers in banks are highest at Rs. 2.7 trillion. It is followed by deposits of more than Rs. 2 trillion maintained by unemployed housewives and students, and Rs. 1.6 trillion by salaried class in the multiple types of accounts in different banks.
Matlab Ab FBR / SBP Se Phoch K Kare Transaction :
Another “nice” move. I hope it aggravates the current account deficit as well. Such stupid measures by the govt point to a pointless governance model that’s going to be extinct very soon Insha Allah.
They are not withdrawing, people now a days using their saving for daily life, as no or zero business in country.
Current situation is very pain full, even majority unable to pay bills, specially electric as summer on full swing.
god bless to our country
Let them be afraid.
What will they do with this cash? Either invest somewhere or keep cash which I am sure is VERY SAFE.
“People at large are afraid of the tax authority”
You dont need to be afraid if you have nothing to hide. People who are withdrawing wants to evade tax
Even if you don’t have to hide once your under radar FBR people will be happy to find more victims to greece their palm or listen the music of miserable life of unilateral inflated income, asking you to pay 50% of tax and fine, hiring income tax advocate to fight your case and ultimately spending much more for the rest of your life in this case. This is my personal experience.
اس کا بہت آسان حل ہے حکومت بڑے نوٹوں کی نوٹ بندی کر دے وہ خود بخود پیسے بنک میں جمع کروانے پر مجبور ہو جائیں گے
All these stupid and unwarranted acts by the govt. has all ready eroded the confidence of the pubkic at large, whether they be businessmen, entrepreneur or general public at large. This govt. is the most atrocious and barbaric govt. in the history of Pakistan after zia.
Stubid things this gov is doing haven’t heard about these thing in any country even in communist China u have freedom to keep money in your account they are only robbing the poor.
Taxes wo Govt collect karti hain ,jo in return awam ko facilities provide karen like free education, free medical, old age benefit, un employment allowance etc… …
We are already paying GST on all products…… in return got nothing…. … public toilet bi use karo tu 30 rupees tax ha….. ab jan lo ga bachay ki…. . Pakistan ma paida hona saza banta ja raha ha…
Govt of Pakistan is taking panic measures instead of collecting the already imposed taxes. Govt should stop harassing people in the name of Income declaration and income taxes when inflation is already at peak. Even if they work to collect the GST properly and reduce Manpower in the govt companies like electricity and gas companies etc, they will be more productive. Govt should replace 5 idle sitting officers with 1 educated, skilled and trained graduate who can use computers and software to get business ongoing. IT implementation in all govt departments from schools to hospitals and district offices should be the priority of govt to work efficiently instead of just imposing nerves and harassing people for their savings. It’s nothing but an apparent extortion to the middle class’ hard earned money. And btw rich and poor all are citizens of Pakistan alike; stop harassing people just because they worked hard to become rich.
Can anybody tell me what is the actual announcement by govt. I didn’t get the point why people are maintaining one account
Govermint ban 5000 curancy notes
Public harassment is not solution of economy problems .GST is good method for tax collection ,at this way general public pay more tax then direct tax method.