Islamabad: Tax return filers will no longer incur withholding tax on their bank transactions, a news report stated. Finance Minister Asad Umar made the announcement in the mini-budget presented on Tuesday.
Currently, advance tax is withheld on cash withdrawals, whenever the total withdrawal from all bank accounts exceeds PKR 50,000 within a day’s timeframe. It is also applicable on purchases of certain banking instruments made against cash. These include pay orders, demand drafts, online transfers, etc. The deduction is 0.3% and 0.6% of the withdrawn amount, for filers and non-filers respectively.
Presenting the mini-budget, Umar proposed to strike down withholding tax deductions for filers. Additionally, he recommended abolishing withholding tax on cash withdrawals from PKR accounts funded through foreign remittances. This move will facilitate overseas Pakistanis, and boost inflow of foreign remittances through conventional banking channels.
The minister reasoned that tax return filers are compliant taxpayers. As such, the government wishes to acknowledge their disclosure efforts.
