FBR to Challenge Islamic Council’s Ruling Declaring Withholding Tax Un-Islamic

The Federal Board of Revenue (FBR) has decided to challenge the Islamic Ideological Council’s (IIC) ruling, which declared the withholding tax on money withdrawals or transfers as un-Islamic, in the Supreme Court of Pakistan, sources told ProPakistani. The IIC recently ruled that imposing withholding tax on withdrawing or transferring money from banks is against Shariah principles and likened it to an act of exploitation. The Council further maintained that such a tax places an undue burden on citizens and should not be enforced. However, sources within the FBR confirmed that the authority strongly disagrees with the Council’s stance and has resolved to take the matter to the Supreme Court. According to officials, the FBR views withholding tax as a legitimate fiscal tool essential for expanding the tax net and ensuring compliance. The legal challenge is expected to set the stage for a high-profile confrontation between the government’s top revenue body and the country’s highest religious advisory institution on financial and taxation matters.