Non-filers received unwelcome news as the government deducted Rs10 billion in withholding tax from their withdrawals during the first 10 months of the current fiscal year.
Citing sources within the Federal Board of Revenue (FBR) that if a non-filer withdraws Rs50,000 from a bank, Rs300 will be deducted from the withdrawal as withholding tax. Similarly, if the same amount is withdrawn through an ATM or a credit card, Rs300 will be deducted.
The report indicated that the Rs10 billion was collected from banks headquartered in Karachi.
Under section 231 of the Income Tax Ordinance, 2001, advance tax is imposed on cash withdrawals. The deductions in withholding tax were made by banks from individuals not listed on the ‘Active List’.
Experts highlighted that the objective behind imposing withholding tax on non-filers is to bring them within the tax ambit.
