FBR Hikes Non-Filer Cash Withdrawal Tax to 1.2%

Islamabad, May 31 — The Federal Board of Revenue (FBR) has put forward a bold proposal to hike the withholding tax rate on cash withdrawals by non-filers from 0.6% to 1.2%, aiming to generate additional revenue for the 2025-26 fiscal year, a news report reveals. The tax will double to 1.2% on withdrawals exceeding Rs50,000 daily, covering credit card and ATM transactions, starting a crackdown on tax evaders.

From July 1, 2025, the government will impose financial restrictions on non-filers, branded as “ineligible persons”, barring them from financial transactions, as outlined in the Tax Laws (Amendment) Bill, 2024, greenlit by the National Assembly Standing Committee on Finance and Revenue. A gradual rollout is under consideration, weighing revenue impacts of scrapping all non-filer taxes immediately. The Finance Act 2023 had reinstated the 0.6% tax on withdrawals over Rs50,000, now set for escalation.

Web context highlights Pakistan’s tax gap (e.g., 60% non-filers, web ID: 0), while posts found on X show public outrage—some call it harsh, others question enforcement. Critically, the narrative of “revenue boost” may mask social backlash—web sources note economic hardship, and X sentiment suggests distrust in policy fairness, hinting at compliance resistance.