The federal government has decided to increase the Withholding Tax (WHT) on international credit card transactions from 1 percent to 5 percent in the fiscal year budget 2023-24, while the WHT on non-ATL will be increased from the current 2 percent to 10 percent.
The government has also proposed to increase the rate on the fee for off-sure digital services from 10 percent to 15 percent under section 152(1C) of the said Ordinance.
In his budget address today, Finance Minister Ishaq Dar stated that increasing foreign exchange reserves and remove loopholes impeding progress in this regard.
For this purpose, Dar said the government has decided to discourage foreign currency outflow through banking channels and credit/debit cards by increasing WHT on such transactions to 5 percent.
Pertinently, this step aims at encouraging the general public to use documented banking channels, which are generally more secure, to fulfill their genuine foreign exchange needs while at the same avoiding loopholes that impede forex growth.
