CII declares withholding tax on money transfers and withdrawals 'un-Islamic'

The Council of Islamic Ideology (CII) on Wednesday ruled that the withholding tax on bank withdrawals and money transfers is “un-Islamic.”

A meeting, chaired by CII Chairman Allama Dr Muhammad Raghib Hussain Naeemi, reviewed several matters of religious and legal importance, according to a statement issued after its 243rd meeting.

“The council declared the withholding tax imposed on withdrawal or transfer of money as excessive and declared it un-Islamic,” the statement said.

The Federal Board of Revenue (FBR) describes withholding tax as an advance payment collected at the time of specified transactions under the Income Tax Ordinance, 2001, and the Sales Tax Act, 1990.

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During the session, the CII also deliberated on issues such as insulin components derived from pork, proposed changes to the law on diyat (blood money), and the handling of copies of the Holy Quran used for testimony.

On diyat, the council rejected the proposed amendment bill, stating that “the Islamic amounts of diyat, namely gold, silver and camels, should remain included in the law, while the bill has deleted silver and made the un-Islamic amount of gold a standard.”

The CII also voiced concern over a recent Supreme Court ruling by a two-member bench, which had held that iddat and maintenance were mandatory for a woman in the event of divorce, even if the marriage was not consummated. “This decision is against the Quran and Sunnah,” the council said.