The federal government has decreased the withholding tax rate on bank-issued debit card transactions, aiming to discourage informal financial activity and strengthen the documentation of the economy.
Currently, a 5 percent withholding tax is charged on every debit card transaction. Finance Minister Muuhammad Aurangzeb in his budget speech today said this has encouraged the use of cash-based and other non-traditional payment methods, reducing transparency in financial flows.
To address this, authorities have decreased the uniform withholding tax rate to 0.5 percent on debit card transactions.
The measure is intended to discourage undocumented financial activity and promote a more transparent and traceable digital economy.
We will update this story as more information comes along.
