ISLAMABAD – Islamic Ideology Council (IIC), the top Islamic body in Pakistan, has reversed its decision of declaring the withholding tax “un-Islamic” for further consideration.
IIC Chairman Allama Raghib Naeemi told media that the body will again review the matter related to withholding tax in next meeting.
He stated that the tax matter was the final items on agenda of the recent meeting, adding that several members left after the food was served during the meeting.
Allama Raghib Naeemi said that many members of the council were against withholding tax, and the staff who were taking notes misunderstood that withholding tax was declared un-Islamic.”
A day earlier, IIC termed withholding tax as un-Islamic, warning that it amounts to oppression against masses.
According to a press released, which has now been withdrawn, Chairman Allama Dr. Raghib Naeemi presided over meeting, as council expressed strong reservations, criticizing it unjust and contrary to Islamic principles, urging government to reconsider its imposition immediately.
The council’s statement ignited debates across political, religious, and economic circles, with many calling it a landmark declaration on citizens’ financial rights under Islamic law.
Earlier this year, Federal Board of Revenue denied reports of a 20.5 percent tax on cash transactions exceeding Rs200,000, clarifying that no such levy has been introduced. The confusion surfaced after an amendment in Finance Bill 2025, which disallows 50 percent of claimed expenses for sales where payments above Rs. 200,000 are made in cash or outside banking/digital channels, per invoice.
