Pakistan mulls reviving withholding tax on cash withdrawals, bank transactions in upcoming budget

ISLAMABAD – The federal government is considering a recommendation of the Reforms & Revenue Mobilization Commission to restore withholding tax on cash withdrawals from the banks by the non-filers.

Reports in local media suggest that the incumbent government moved to slap withholding tax among several new duties to address the narrow tax base and strengthen tax administration as the country is facing the worst economic crisis in recent times.

The new taxes are likely to impose on banking instruments, and banking transactions by the non-filers, however, no final decision has been taken as of now.

In the upcoming budget, the government also considering to abolish withholding taxes having less revenue impact on direct taxes collection.

Reforms & Revenue Mobilization Commission also recommended Finance Ministry to abolish tax under sections 236G, 236H, 153, and 113 of the Income Tax Ordinance 2001 applicable to the wholesale.