The government is considering imposing withholding tax on cash withdrawals from banks and banking instruments, and withholding tax on banking transactions other than through cash, through the promulgation of a Presidential Ordinance.
Highly-placed officials confirmed to ProPakistani that the Federal Board of Revenue (FBR) has drafted the proposal as a major revenue generation measure, but the same has not been finalized or approved by Finance Minister Ishaq Dar.
“Yes three proposals have been chalked out including restoration of section (231A); Collection of tax on cash withdrawal; section (231AA) Collection of tax on banking instruments and section (236P) collection of tax on banking transactions other than through cash. If the proposals are approved, it would be made part of the Presidential Ordinance to be promulgated”, they added.
The FBR has repeatedly claimed that many withholding tax provisions were eliminated and consequently, the percentage contribution of withholding taxes indirect taxes has also been reduced. But the proposed measure is against the policy of reducing reliance on withholding taxes.
The abolished section 231A of the Income Tax Ordinance 2001 stated: “Every banking company shall deduct tax at, if the payment for cash withdrawal, or the sum total of the payments for cash withdrawal in a day, exceeds Rs. 50,000.
The abolished section 231AA of the Income Tax Ordinance 2001 says: “Every banking company, non-banking financial institution, exchange company or any authorized dealer of foreign exchange shall collect advance tax at the time of sale against cash of any instrument, including demand drafts, pay orders, call deposit receipts, special term deposits, special drawing right, real-time clearing, or any other instrument of bearer nature or on receipt of cash on cancellation of any of these instruments.
Under section 236P of the Income Tax Ordinance 2001,
- Every banking company shall collect advance tax from a person whose name does not appear in the Active Taxpayers List on the sale of instruments, including demand drafts, pay orders, special deposit receipts, cash deposit receipts, short-term deposit receipts, call deposit receipts and rupee travelers’ cheque, where payment for sum total of all transactions exceed Rs. 50,000 in a day.
- Every banking company shall collect advance tax from a person whose name is not appearing on the active taxpayer’s list on the transfer of any sum through cheque or clearing, interbank or interbank transfers through cheque, online/telegraphic/mail transfer, where payment for sum total of all transactions exceeds Rs50,000 in a day.
The FBR has witnessed a decrease of 0.2 percent in withholding tax collection from cash withdrawals from banks during 2020-21.
According to the FBR’s year book (2020-21), the decline in WHT collection cash withdrawals from banks is the direct consequence of a higher number of income tax return filers, which reduced collection of WHT from non-filers under this head. However, there was no change in WHT tax rates during 2020-21.
This will surely lead to grey channels and increase cash transactions.
FBR naver be impose tex on elite class income and lavishly life . Fbr only tighten the common man . Even fbr knows better elite class earned billions of rupees from different sector’s and 1 single penny not deposit in shape of tex. For example. Shops keeper purchase Veet from former some of 2000 per 40 kg and now a days sell in markeet 5400 per 40 kg . And also other food items . In other side plastic raw metrial 7000 per bag 25 kg . And shop keeper’s and other stockist sell in a weak to highly side to price 16000 thousands plus . Hugely income but fbr no collection tex form their highly income . Because they belong directly in directly the elite and fbr protect them this is the real face and story .
No one in Pakistan pays tax be it the elites or the commons. It’s not only a problem with people but with lack of enforcement by government.
I think you need to review your comments..
If no one is paying tax in Pakistan then how Pakistan is running and even..
First of all see your Electric Bill then reply..
Pakistani pays tax on
Mobile loads
Making calls
Filling petrol
Airline tickets
All utility Bill’s
Internet connections
Purchase of packed food stuff.
Soft drinks
And on everything except vegetables
Dear please quite if any vegetable vendor read your comment we are facing a new problum
This proposal is absolutely without any thought. No idea what the Government is thinking. It will only result in increase of unofficial economy and purely cash transaction. This action actually is to discourage banking transaction, cash or otherwise. Maybe this is what the present government wants after all. An unofficial black economy.
Crypto currency use ho ge fir . Pakistan ma BHI common.
Bank Deposits and Banking by majority population will dwindle. Underground Cash economy will rise. Cash will disappear in banks.
FBR = Federal Board of Robbers
It’s our cash from savings or whatever, already taxed through income or sales etc, why we should pay WH tax for keeping it in bank besides banking charges etc.. Highly unfair, easy game for FBR to extract through indirect taxation and to hide their incompetency to collect revenue through direct taxes
These thugs are going to suck the wind out of this nation.
First the FBR should be asked to provide statistics on the percentage of cases for which WHT is adjusted and refunded to the person. Only after FBR reaches 90% WHT refund rate should they be allowed to implement any new form of WHT. Millions of cases of refund of WHT are pending unsettled and they want impose for WHT, this is travesty of the highest order.
Ok bye bye Banks, cash in hands transections welcome
East India company nay awam ka itna khoon nahi chosa ho ga Jo hall apnay he county mean ho raha ha.
The only solution is in ko ghar mei ghuss kr Maro.. ye lato k Bhoot hain baton se nahi manenge
The government of thieves along with its neutral papa will steal everything from the commoners
Choron ne chori k nit nay triky dhund liye hn
Qasam se agar jo tax hum pay karty hain wo humhx lagta howa nazar aaye, hum khushi se dein. Even k Europe USA main iss se ziyada tax lety hain. magr waha log khushi se pay karty hain. itne facilties dety hain tax payer ko.
Common peoples like pensioners students household ladies will be affected by levying WHT on banking transactions in respect of non filers. the business community usually deals in ready cash instead of banking channels.
My jazz account number 03181343343
پیسہ عوام کا عوام پہ لگنا چائیے ہر چیز پہ ٹیکس لگا رہے ہو چور خود کتنا ٹیکس دیتے
Pakistani pays tax on everything
Mobile loads
Making calls
Filling petrol
Airline tickets
All utility Bill’s
Internet connections
Petrol
Gas
Land buy or sell
Purchase of packed food stuff.
Soft drinks and anything they buy there are direct and indirect taxes
Hy