Advance Tax On Bank Withdrawals Increases July

The federal government is considering a proposal to increase the advance tax on cash withdrawals from banks by non-filers for the next fiscal year, 2024-25. This proposal emerged during ongoing negotiations with the International Monetary Fund (IMF) regarding another bailout package.

Officials from the Federal Board of Revenue (FBR) have suggested raising the tax from the current 0.6 percent to 0.9 percent on cash withdrawals by non-filers, effective from the new fiscal year. In the previous budget for 2023-24, the government had already imposed a 0.6 percent advance tax on non-filers’ cash withdrawals.

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If this proposal is approved by parliament in the upcoming budget, the FBR expects to collect an additional Rs 15 billion from non-filers. Pakistan’s federal budget for the fiscal year 2024-25 is set to be presented on June 7, with total projected expenditures reaching Rs 16,700 billion.

Preliminary estimates indicate that spending on interest and loan repayments will amount to approximately Rs 9,700 billion, while subsidies are projected to be around Rs 1,500 billion. The tax revenue is expected to surpass Rs 11,000 billion, with direct taxes contributing Rs 5,300 billion and federal excise duty bringing in about Rs 680 billion. Additionally, sales tax is anticipated to generate over Rs 3,850 billion, and customs duty is expected to exceed Rs 1,100 billion.