Government plans restore cash withdrawal ‘withholding tax’

The government intends to reinstate the withholding tax on cash withdrawals made by non-filers from banks.

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The Federal Board of Revenue (FBR), according to local media reports, is thinking about reinstating withholding tax on cash withdrawals, banking transactions, and banking instruments by non-filers in the 2018 budget.

The planned withholding tax on non-filers’ banking activities is expected to generate close to Rs. 45 billion in revenue.

On the other hand, the government has chosen to eliminate withholding taxes in the upcoming budget (2023–24) because they have a minimal revenue impact on the collection of direct taxes.

According to reports, the government budget for 2023–24 may eliminate the low yield withholding taxes.

In February 2023, a section 236 B was added to the mini-budget that allows anyone planning or hosting a function in a wedding hall, marquee, hotel, restaurant, commercial lawn, club, etc. to pay an advance tax of 10% (withholding tax) on the total amount of the bill.