Pakistan mulling to increase tax on cash withdrawal from bank

The federal government is considering an increase in the advance tax rate for cash withdrawals made by individuals not listed as tax filers from banks in the forthcoming fiscal year's budget.

Reports from various media outlets indicate that this tax adjustment has surfaced during the ongoing discussions with the International Monetary Fund (IMF).

The Federal Board of Revenue (FBR) has suggested raising the advance tax rate from 0.6 per cent to 0.9 percent for non-filers on cash withdrawals in the upcoming budget year. This proposal has received a nod from the IMF.

Initially introduced last year, the government had imposed a 0.6 percent advance tax on individuals not enlisted as tax filers.

Sources suggest that if parliament approves this tax modification, the FBR could potentially generate over Rs. 15 billion annually in revenue from non-filers.

Additionally, the FBR has proposed an increase in withholding tax for vehicles with engine capacities of 850cc or higher. Should parliament endorse this proposal, it would lead to a hike in vehicle prices next year, while also resulting in higher tax revenues for the FBR from automobile consumers.

Moreover, the government is contemplating imposing elevated taxes on the sale and purchase of property plots valued at Rs. 50 million or more.

These suggestions, alongside others, have been laid out before the IMF by the FBR, awaiting approval. Following that, they will be forwarded to Prime Minister Shahbaz Sharif for final authorization.