ISLAMABAD – The federal government has proposed increasing the withholding tax rate on cash withdrawals by non-filers from 0.6 percent to 0.8 pc, while also raising the threshold from Rs50,000 to Rs75,000.
Reports said it was revealed by the Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial during a meeting of the National Assembly’s Standing Committee on Finance.
He said a 1% tax rate on cash withdrawal was mistakenly wrote in the proposed budget for next fiscal year 2025-26, adding that the the actual proposed rate was 0.8%.
Committee Chairman Naveed Qamar remarked that the Rs50,000 threshold was too low and should be raised to at least Rs100,000.
However, after mutual consultation between the committee and the FBR, it was agreed to set the limit at Rs75,000.
The FBR Chairman also clarified that all changes to tax laws related to the banking sector were made with the consent of the State Bank of Pakistan.
Furthermore, Minister of State for Finance Bilal Azhar Kayani informed the committee that the Finance Bill 2025-26 proposed tax relief across all income slabs for salaried individuals, especially for those with annual incomes up to Rs 3.2 million.
It is recalled that the Federal Budget 2025-26 with a total outlay of Rs17,573 billion was presented on June 10, encapsulating measures aimed at promoting inclusive and sustainable economic growth.
Presenting the budgetary proposals for the next fiscal year in the National Assembly, Minister for Finance and Revenue Muhammad Aurangzeb said this budget is a beginning of a strategy, crafted to promote competitive economy.
This, he said, will bolster exports and foreign exchange reserves in order to avoid imbalances in payments and promote economic productivity.
He said the budget strategy is aimed at bringing fundamental changes in the country’s economy.
