Govt to Double Withholding Tax on Cash Withdrawals by Non-Filers

The government is expected to increase the burden on non-filers in the next fiscal year by doubling the withholding tax on their bank cash withdrawals, targeting an additional Rs. 15–20 billion in revenue for 2025-26, sources told ProPakistani. In this regard, a proposal is under consideration to increase the withholding tax on cash withdrawals from banks by non-filers from 0.6 percent to 1.2 percent. At present, over Rs. 50,000 cash withdrawals by non-filers, in a single day, through credit cards/ATMs are also subject to 0.6 percent withholding tax. The Finance Act 2023 reintroduced tax collection on cash withdrawals from non-ATL persons by banks. Section 231AB requires every banking company to deduct advance adjustable tax at 0.6 percent from a person whose name does not appear in the Active Taxpayer List, at the time of making payment for sum total of cash withdrawal (aggregate cash withdrawal) in a single day exceeding Rs 50,000. Cash withdrawals made on credit cards or from ATMs were also be covered by this provision.