Save Our Pak
There are expectations that the government will increase the withholding tax on cash taken out by people who have not submitted their tax returns. The upcoming federal budget for fiscal year 2025–26, which will be announced on June 10, is expected to include the decision.
At present, those who do not file tax returns are subject to a 0.6% tax on bank cash withdrawals over Rs50,000 daily. If the proposal is accepted, anyone with a cash transaction that goes over the limit will have to pay 1.2% which is much higher than the current rate.
Authorities expect that this strategy will make many more people sign up for tax compliance through the FBR. Next, it fits with the strategy of authorities to increase use of documented transactions and reduce cash payments.
Some sources stated that the government is considering extra rules for those who have not filed their taxes, including limits on buying property, vehicles and international travel. The main goal is to get more money from taxes and help fix ongoing financial problems, including rising budget deficits and external debts.
The FBR will probably launch a campaign following the budget to let the public know about the updated tax measures and prompt them to follow tax regulations by choice. Although bankers are worried that the new rate may result in lower deposits and more hoarding money, officials think that the long-term results of tax broadening are better than those risks.
Strong pressure comes from international lenders, for example the IMF, for the government to make more money and control public spending. The government is working to gather more taxes from those who have not filed their returns so that investors return their faith in Pakistan’s economy.
