The federal government has decided to impose a flat 0.6 percent tax on citizens not appearing on the Federal Board of Revenue’s (FBR) Active Taxpayer List (ATL).
According to the budget documents, this tax regime on cash withdrawals would help document the economy.
The document stated that the government has decided to impose a 0.6 percent tax rate on cash withdrawals over Rs. 50,000 in order to document cash withdrawal data on non-ATL individuals and increase their transaction expenditure. This move is likely aimed at attracting more individuals into the tax net.
This law existed previously but was repealed by the previous administration via the Finance Bill 2021.
It bears mentioning that some big measures taken under the Finance Act 2022 against the non-filers were not enforced adequately, and the government this time has decided to strictly enforce measures for improving the country’s tax revenue.