South Asia and Beyond

Pakistan Govt Panel Proposes Tax On Cash Withdrawal

 Pakistan Govt Panel Proposes Tax On Cash Withdrawal

The Pakistani government’s tax commission has proposed re-introduction of withholding tax on cash withdrawal and banking transactions and the elimination of hard dollars from the market aimed at broadening an extremely narrow tax base. Sources said that the Federal Board of Revenue (FBR) was actively considering recommending the re-imposition of 0.6% tax on cash withdrawal, banking instruments and banking transactions with effect from July this year. The Reform and Revenue Mobilisation Commission has proposed that the government should examine how to reduce the circulation of cash and at least eliminate the hard dollar cash in the country. The idea is to end the dollar transactions of foreign exchange companies—some of which have been found involved in money laundering in the past—and hand over the foreign currency business to commercial banks, which will document these transactions, reports The Express Tribune. Pakistan has 7.6 million people registered with the FBR but only 3.6 million file tax returns.


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