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Thursday May 30, 2024

Withholding tax on cash withdrawal proposed

PBC suggests annual advance income tax amount should be increased to 250,000/per year for owners of vehicles of 2000cc who are non-filers

By Ashraf Malkham
June 07, 2023
Representational image. — Twitter/File
Representational image. — Twitter/File

ISLAMABAD: The Federal Board of Revenue (FBR) is mulling options to impose a withholding tax on withdrawals above Rs50,000 in a single day from the bank account of a non-filer on the recommendations of the Pakistan Business Council (PBC).

The council has proposed the revenue board impose higher advance taxes on utility bills, real estate transactions, and luxury expenditures of non-filers.

It has been argued that the annual advance income tax amount should be increased to 250,000/per year for owners of vehicles of 2000cc and above who are non-filers.

It further added that on the purchase of cars, advance income tax is levied on non-filers [under section 231B] as tabulated below, which should be increased as suggested below:

Engine capacityExisting taxProposed increased tax
1800cc -2000cc
Rs600,000
Rs2,000,000
2001cc-2500cc
Rs900,000
Rs2,500,000
2501cc-3000cc
Rs1,200,000 
Rs3,000,000
Above 3000cc
Rs1,500,000
Rs 4,000,000

Moreover, it suggested that advance income tax of Rs1,200,000 on the sale of vehicles [2001cc and above] by non-filers before registration [own money] should be increased to 2,400,000.

Advance tax at 7.5% is collected from domestic connections in the name of non-filers whose monthly bill is Rs25,000 or more.

Moreover, sources in the FBR told Geo News that the board has decided to increase the petroleum development levy from Rs50 to Rs60 after which it will be able to collect Rs870 billion. The government aims at increasing non-tax income to Rs2.9 trillion.

The sources said that with the aforementioned steps, the government plans to increase the pensions by up to 30% for which it will need Rs780 billion.