26/05/2024
Currently, a withholding tax is levied on withdrawals exceeding Rs 50,000 in a single day from the bank accounts of non-filers. The proposal to elevate this rate from 0.6 percent to 0.9 percent aims to boost revenue generation in the upcoming fiscal year.
Sources within the FBR disclosed that the agency collected Rs 10 billion in withholding tax from cash withdrawals at banks in Karachi alone during the first 10 months of the current fiscal year. This substantial figure underscores the tax’s efficacy as a revenue tool.
The withholding tax on cash withdrawals was reinstated through the insertion of Section 231AB in the Income Tax Ordinance, 2001. This section mandates that banks deduct an advance adjustable tax at a rate of 0.6 percent from individuals not listed on the Active Taxpayer List (ATL). The tax applies to all cash withdrawals exceeding Rs 50,000 in a single day, including those made through credit cards or ATMs.
