The Pakistani government has recently announced its decision to re-introduce the tax on withdrawals from cash and banking transactions. The tax was previously abolished to ease the tax burden on the people through the Finance Bill 2021. However, due to the current economic conditions, the government has decided to re-implement the tax. This move is expected to generate revenue for the Federal Board of Revenue (FBR) and encourage taxpayers to become filers.
The re-introduction of the tax on withdrawals from cash and banking transactions will be implemented through the reinstatement of sections 231A, 231AA, and 236P. These sections deal with the collection of tax on cash transactions, the collection of tax on banking transactions, and the collection of tax on banking transactions other than cash. The expected tax implications will be implemented through a Presidential Ordinance promulgated by the government.
The removal of the above sections had resulted in a decrease in revenue collection for the FBR through the collection of withholding taxes. The limit for cash withdrawal without tax was set at Rs. 50,000 per day. However, the proposed changes might have a more significant impact on students, household ladies, and individuals who deal with ready cash more than the business class.
It is expected that the re-introduction of the tax on withdrawals from cash and banking transactions will increase the revenue collection of the FBR. The tax is also expected to incentivize taxpayers to become filers. However, it is essential to ensure that the implementation of the tax does not adversely affect the common man.
In conclusion, the re-introduction of the tax on withdrawals from cash and banking transactions in Pakistan is a significant development in the taxation landscape of the country. The tax is expected to generate revenue for the government, but it is essential to ensure that the implementation of the tax is done in a way that does not burden the common man. It is hoped that the government will take necessary steps to ensure that the proposed changes are implemented smoothly and without any adverse impact on the public.