Non-filers: Govt decides to hike cash withdrawal limit to Rs75,000
ISLAMABAD: The government has decided to increase limit from Rs50,000 to Rs75,000 for charging enhanced rate of withholding tax of 0.8 percent on cash withdrawals from banks by non-filers.
The assurance has been given by Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial during review of Finance Bill (2025-26) at a meeting of the National Assembly Standing Committee on Finance held here on Friday at the Parliament House.
During the meeting, the FBR chairman informed the committee that the rate has been proposed to be raised from 0.6 percent to 0.8percent.
Cash withdrawals from banks: FBR proposes raise in WHT for non-filers
Chairman of the committee Naveed Qamar stated that the limit is very low which needs to be increased to Rs100,000.
However, both the committee and FBR mutually agreed to raise the limit upto Rs75,000 under the Finance Bill (2025-26).
On the conclusion of the committee meeting, the FBR chairman informed media that the Finance Bill (2025-26) has increased the withholding tax rate on cash withdrawal from banks from 0.6 percent to 0.8 percent.
Due to an inadvertent mistake in budget speech, the rate of one percent has been announced. 'The proposed rate is 0.8 percent and not one percent as announced in the budget speech (2025-26)', the FBR chairman added.
About reduction in incidence of tax on salaried class, Minister of State for Finance Bilal Azhar Kayani said that there is a reduction proposed in all slabs of salaried individuals.
Tax rates for salaried individuals for income slab upto Rs3,200,000 has been reduced to provide relief to lower and middle tiers income bracket.
Minister of State for Finance Bilal Azhar Kayani said that the Finance Bill 2025-26 has proposed one percent tax on income slab between Rs600,000 and Rs1.2 million under revised salary slabs.
Later, the budget meeting of the federal cabinet has approved 2.5 per cent tax on income slab between Rs600,000 and Rs1.2 million.
When committee members asked about the reason behind this federal cabinet's decision, Kayani said that the government has increased salary of federal government employees by 10 percent.
Therefore, due to limitation of fiscal space, the tax rate was proposed to be increased from one percent to 2.5 percent for the said salary slab.
The FBR chairman said that the FBR has proposed only those changes in banking taxation laws which were agreed by the State Bank of Pakistan (SBP). The provisions regarding assessment of banking companies has been made more disclosure oriented to determine true and fair income of the banking companiesand tax payable thereon under Finance Bill 2025-26. 'The extraordinary treatment given to banks in terms of taxation has been reviewed,' Langrial stated.
The FBR chairman said that very slight reduction has been made in the rates of the super tax in budget 2025-26 to give a signal to the corporate sector that the government is committed to reduce burden of taxes on compliant sectors. Super tax rates under Section 4C of the Income Tax Ordinance proposed to be reduced by half a percentage point for income slabs between Rs200 million to Rs500 million against each slab respectively.
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
9 hours ago
- Express Tribune
Lawmakers demand tax relief for masses
On June 10, Finance Minister Miftah Ismail had announced an income tax relief of Rs47 billion for the salaried class. PHOTO: FILE Listen to article Lawmakers in the National Assembly on Saturday delivered a detailed and constructive review of the federal budget for FY2025-26 and called for providing more relief to the common man. While participating in the general discussion on the budget, Defence Minister Khawaja Asif said Pakistan suffered huge losses due to tax evasion, especially in sectors like tobacco, real estate, steel, and tyres. "We lose around Rs300 billion annually in tobacco taxes alone." He acknowledged that the Federal Board of Revenue (FBR) has made some improvements, but much more needs to be done. "If we can just improve our tax collection by 50%, we wouldn't need foreign loans," he noted. He demanded accountability and urged the finance ministry and the FBR to brief parliament on the large-scale tax evasion and the people behind it. "We need honesty in governance. Only then can we provide real relief to the people," he said. He gave the example of how public shops in Punjab are rented for very low rates, while private shops in the same area earn ten times more. "This has continued for decades without accountability," he pointed out. He called for a national campaign to end corruption, particularly in sectors dominated by a few corrupt families. Asif praised Finance Minister Muhammad Aurangzeb, calling him a professional and experienced person. He credited him for bringing back international trust in Pakistan's economy. He shared encouraging economic data: GDP growth improved from -0.2% to +2.7%, inflation dropped to 4.6%, and the current account posted a $1.2 billion surplus. foreign investment rose by 20%. He admitted that the public may still be feeling economic pressure but said positive changes are happening. "The business community is showing more confidence, and the stock market recently hit a historic 125,000-point high," he said. He criticized those who now attack the government's economic policy but had once urged the IMF not to support Pakistan. "These people tried to sabotage our economy," he said. "Pakistan is not about any one person. It is a mission, a belief, and a shared history," he added. He urged political leaders to rise above personal ambitions and serve the nation with sincerity. PPP senior leader Mirza Ikhtiar Baig emphasised the pivotal role of the industry, agriculture and services sector in driving long-term economic stability. Acknowledging the ongoing economic challenges, he said the government's push toward reforms, though modest GDP growth of 2.6% continues to be overshadowed by inflation, population pressure and mounting national debt. He raised concern over pension reforms, particularly the withdrawal of posthumous benefits for pensioners' children after 10 years, warning this could create financial distress for many families. The lawmaker also cautioned against harsh tax enforcement measures, such as granting arrest powers to income tax officers, which he said could dampen business confidence. However, he welcomed incentives in the construction and property sectors, including the reduction in withholding tax on property transactions from 4% to 2.5%, elimination of federal excise duty on commercial property transfers and reduction of stamp duty in Islamabad from 4% to 1% — measures expected to boost real estate activity. He also supported the increased defense budget, recognizing the valor and international standing of Pakistan's armed forces, particularly in light of recent hostilities. Mirza Ikhtiar praised the record-breaking $38 billion in remittances sent by overseas Pakistanis and called for an export-led growth model, especially through sectors like IT and rice. PTI legislator Asad Qaiser urged the government to revisit its decision to impose new taxes in the erstwhile FATA region, emphasising the area's sacrifices in the war on terror. Qaiser warned that further burdens could hinder socio-economic rehabilitation. He also highlighted issues of power outages and damage to household appliances in Khyber Pakhtunkhwa due to erratic electricity supply, urging greater PSDP allocations for the province. Qaiser raised alarms about the tobacco sector, noting the lack of a fixed minimum support price, which is driving companies out of K-P. He called for urgent government intervention to protect farmers. Senior MQM leader Dr. Farooq Sattar hailed the armed forces for their resilience during recent Pakistan-India tensions, crediting divine help and national unity under Field Marshal General Asim Munir. He appreciated relief measures for salaried classes in the budget but warned that the middle class continues to bear a disproportionate tax burden. Farooq Sattar urged reforms to reduce electricity and gas tariffs and proposed a national economic dialogue to adopt a unified "Charter of Economy." He stressed the importance of taxing agricultural income through provincial consensus under Article 177 to improve Pakistan's fiscal credibility with international lenders. Condemning Israeli aggression, he reaffirmed solidarity with Iran amid recent tensions. PPP stalwart Syed Naveed Qamar took a strategic view, asserting that the federal budget must not be limited to a balance sheet but should reflect a coherent economic vision. He stressed that budgetary allocations must align with policy goals rather than serve as mere political optics. Naveed Qamar criticized the neglect of agriculture, especially in terms of food security and misdirected subsidies that favor foreign producers over domestic farmers. He lamented that serious economic reformers are often sidelined while superficial narratives dominate policymaking. Naveed Qamar criticized Pakistan's reliance on international lenders and the failure to promote domestic exports, particularly in the cotton sector. The fertilizer subsidies and price controls, he argued, have hurt small farmers while benefiting powerful industrial lobbies. Naveed Qamar has called for the adoption of a clear, flexible, and consistent economic policy in anticipation of potential global oil price hikes, warning that the country cannot afford to remain tethered to outdated and reactive financial planning models. He cautioned that international oil price fluctuations pose direct risks to Pakistan's fiscal strategy, inflation targets, and energy affordability. He criticized the government for preparing budgets based on optimistic oil price assumptions without accounting for geopolitical volatility. "In recent years, our budgets were framed based on declining global oil prices. But if the situation in the Middle East worsens and prices suddenly spike, do we have an alternative strategy in place?" he asked, urging the finance ministry to explain whether price increases would be passed on to consumers or absorbed through subsidies. He stressed that such vital economic variables demand transparency and contingency planning. "There must be clarity. If the benchmark price increases by 20%, what is the fallback? Ad hocism will not take us forward." Naveed Qamar underlined the need for economic policies that transcend partisan agendas and prioritize institutional coherence. "We hear at the Prime Minister's level about the need for policy consistency. But if decisions continue to be made in silos, without coordination, instability will persist." He also urged serious consultation among political leadership, bureaucratic institutions, and the business community, warning against policy capture by a select few. "It's unacceptable that one individual travels abroad and makes decisions on the nation's behalf, while key institutions remain unaware. Responsible policymaking requires collective ownership." He criticized the enduring influence of those who, he alleged, negotiated economically detrimental deals in past decades, leading to chronic dependence on external actors. "The same people who committed the country 30 years ago are still writing our policies. If we want sovereignty, we must abandon these recurring policy patterns." He stressed the need for a forward-looking, sovereign, and inclusive economic framework — one that replaces reaction with resilience. "We must move beyond fire-fighting. Only with vision, transparency, and consensus can we break the cycle of economic instability." Taking part in the debate, MNA Zartaj Gul stressed the need for increased budgetary allocations for women empowerment, calling it vital for the uplift of a key segment of society. She also warned of the grave threat posed by climate change and called for greater resources to mitigate its impact. Stressing the importance of regional equality, she urged a fair share of development funds for the Saraiki belt, noting its population is comparable to other provinces. Haji Jamal Shah Kakar lauded Prime Minister Muhammad Shehbaz Sharif for earmarking Rs 250 billion for Balochistan, terming it a long-overdue recognition of the province's importance. He welcomed allocations for infrastructure and highways but stressed the need for transparency and proposed the formation of a monitoring committee to ensure efficient fund utilization. PPP MNA Syeda Shehla Raza condemned the Israeli aggression against Iranian civilians, calling for global accountability. She criticized the federal budget for raising taxes and imposing a carbon levy while neglecting Karachithe country's economic hub. Opposing a new Danish university in Islamabad, she argued that existing institutions remain underfunded. She also highlighted the decline in oil and gas output, despite discoveries in Khairpur, and advocated urgent reforms. On a positive note, she welcomed the Reko Diq project, saying it could contribute 1% to Pakistan's GDP next year. Iqbal Afridi raised serious concerns regarding the rehabilitation of the merged districts (former FATA), urging the government to expedite the reconstruction of destroyed homes and ensure the return of displaced populations. He also demanded the withdrawal of newly imposed taxes in tribal areas and criticized delays in releasing development funds. Asia Naz Tanoli commended Prime Minister Shehbaz Sharif for enhancing Pakistan's international image and improving the value of the green passport. She described the budget as balanced and people-centric, acknowledging the difficult decisions taken to pursue economic reform and national security. PPP's Sharmila Faruqui pointed out that nearly 70% of the national budget is consumed by debt servicing, leaving limited space for development. Citing Khawaja Asif's statement, she revealed that Rs 5.8 trillion was lost last year due to tax loopholes, subsidies, and concessions. She called for comprehensive tax reforms to ease the burden on the salaried and middle-income classes. MQM-P MNA Sofia Saeed Shah noted that although Rs 3.2 billion has been allocated for the KV-4 water project in Karachi, the amount falls short of the rising costs. She recalled MQM's earlier proposal of Rs 30 billion for the project and questioned the government's claims of reducing electricity prices while increasing levies on fuel. SIC lawmaker Shahzada Muhammad Gushtasap Khan stressed the need to increase allocations for education and health. He praised KP's 100% free healthcare program, attributing its success to effective provincial policy. Syed Ali Qasim Gillani demanded more investment in higher education in South Punjab to improve access. Emphasizing agriculture as the backbone of the economy, he urged greater support for crop production. He welcomed increases in the budgets for the Benazir Income Support Programme (BISP) and the information technology sector. MNA Muhammad Aslam Ghuman condemned Israel's aggression, calling it the "world's biggest terrorist," and reaffirmed Pakistan's solidarity with Muslim nations. He advocated for more support for farmers to ensure food security. Moin Aamer Pirzada called for widening the tax base by expanding the filer network. He also urged a review of the decision to end pensions for deceased government employees, stressing the need for humane policy revisions. PPP lawmaker Nawabzada Mir Jamal Raisani highlighted the federal budget's role in setting the country's economic direction. While welcoming the government's target of 4.2% economic growth and the allocation of special allowances for the armed forces, he expressed disappointment over the lack of substantial allocations for Balochistan. However, he appreciated the establishment of four Daanish Schools in the province and called for vocational training institutes to empower local youth. MNA Sajid Khan demanded the establishment of a Danish School in the merged tribal areas and emphasized coordinated efforts between federal and provincial governments to maintain peace in the region. SIC legislator Umair Khan Niazi criticized the budget and urged the inclusion of more high-net-worth individuals in the tax net. He called for increased allocations for agriculture and concrete support for farmers. PPP's Salahuddin Junejo raised the long-standing issue of the Hyderabad-Sukkur Motorway project and urged the Prime Minister to reconsider its funding. He advocated a structured agricultural policy to improve productivity. Highlighting injustices in his constituency, he said locals were not benefiting from natural gas extracted from the region and demanded job and resource rights for local residents. Junejo also thanked the Prime Minister for dispatching Bilawal Bhutto Zardari on diplomatic missions, praising his effective representation of Pakistan on the global stage.
Express Tribune
13 hours ago
- Express Tribune
Faceless customs system rollout halted on flaws
Listen to article A review committee has recommended that the Federal Board of Revenue (FBR) halt the further rollout of the much-publicised Faceless Customs Assessment (FCA) system after discovering that it caused a 57% increase in container clearance time and a decline in revenue. The Review Committee on FCA also questioned the system's design, stating that it had been tested 20 years ago and later discontinued due to similar flaws. After early reports of success, Prime Minister Shehbaz Sharif travelled to Karachi in January to inaugurate the new system. The FCA was introduced to eliminate physical contact between importers and customs officers, aiming to increase revenues and speed up clearance of imported containers. "This committee does not recommend implementation of further phases or rollout of FCA unless its efficacy is confirmed through other means or with larger datasets, or its design is reviewed," the three-member committee stated in its report finalised last month. According to FBR's original plan, the second phase of the FCA was to be implemented by June 2025 at all Appraisement Collectorates, dry ports, and land border stations. The third phase, scheduled for September 2025, would extend the system to all airports and Export Collectorates. However, the committee has now advised halting the expansion due to major issues in the first phase. The FCA's implied objective was to curb collusion between importers and customs officers, which was seen as a cause of revenue loss. But the report states the system "has not achieved this objective." FBR Chairman Rashid Langrial told the National Assembly Standing Committee on Finance this week that the system was not primarily aimed at increasing revenue. The report noted that two of the FCA's basic design concepts — hiding trader information from assessing officers and ending specialised assessment groups — had already been tried and abandoned 20 years ago when Pakistan Customs' first computerised system was introduced. The reasons for their earlier failure remain valid today. The committee found that specialised assessment groups helped build sector-specific institutional memory and stronger customs controls, while also reducing clearance time through repeated handling of similar products. Langrial acknowledged the implementation problems during a meeting with the Finance Committee on Friday and said they would be resolved by next month. However, the very committee formed under his orders has recommended halting the rollout. The final report on FCA and Centralised Assessment Unit (CAU) performance was submitted to FBR management last month, in response to a review ordered by Langrial. The report revealed that in November 2024, before the FCA was implemented, the average clearance time for goods declarations was 25.6 hours. This rose steadily, peaking at 46 hours in April 2025. On average, clearance time increased 57% to 40.2 hours. "It is evident that the dwell time has significantly increased after the implementation of FCA," the report noted. Between July and November 2024 (pre-FCA), 84% of declarations were cleared within 48 hours. This dropped to 70% between December and April 2025 (post-FCA). For goods declarations that were both assessed and examined, average clearance time increased from 74 hours to 81 hoursa 10% jump. The committee also evaluated the system's impact on revenue. Under the previous system, duties collected exceeded declared values by 13% to 17%. But following FCA's introduction, duties and taxes fell. Between February and April 2025, total revenues dropped by 2% to 23% compared to prior months. "The value addition by assessing officers is reflected in the extra revenue collected," the report stated. This contribution dropped from 16% in July-November to 13% in December-April. However, the number of documents called for examination dropped from 37% to 21%. The Director General of Risk Management System and the Member Operations FBR Customs, both part of the review committee, did not respond to requests for comment. The report showed that customs officers now refer more goods declarations to senior officers after assessment. Referrals rose from 6% in the old system to 11% under FCA. Lab referrals also doubled. The WeBOC system allows traders to file reviews before principal appraisers and assistant collectors. Under FCA, such appeals increased from 6% to 14%, further delaying clearance and increasing workload. "Increased examinations, senior officer referrals, lab tests, and especially reviews have offset any time saved from reduced document calls, thereby increasing overall dwell time," the report stated. It also noted that the quality of assessments had deteriorated, as indicated by the surge in review filings. Langrial admitted that clearance times at appraisal and examination stages had risen due to the increased number of reviews filed by importers. "At the design stage, we did not anticipate the rise in reviews," he said, adding that FBR would introduce virtual hearings by assistant and deputy collectors starting July to address the issue. The new FCA system was designed to address long-standing issues in customs processes by enabling remote, technology-driven assessments and minimising physical contact through automation. During the first few weeks of FCA's implementation, the average time for container clearance had initially improved, dropping from 108 hours to 66. However, the long-term data now shows the opposite trend.
Business Recorder
14 hours ago
- Business Recorder
Farmers start receiving tractors under wheat support programme
LAHORE: The Punjab government has started distributing green tractors among farmers under its wheat support programme to encourage wheat cultivation across the province. A total of 1,000 tractors are being handed over through a transparent balloting process. Speaking at a distribution ceremony held in Multan as part of the 'Grow More Wheat' campaign, Punjab Agriculture Minister Syed Ashiq Hussain Kirmani said the Chief Minister of Punjab has introduced a landmark Rs27 billion package to promote wheat farming and increase production. As part of the wheat production competition, farmers at the provincial level will receive an 85-horsepower tractor for the first prize, a 75-horsepower tractor for second, and a 60-horsepower tractor for third. At the district level, the first prize is Rs1 million, second prize Rs0.8 million, and third prize Rs0.5 million. Under this initiative, farmers with wheat crops on 1 to 12.5 acres are receiving a subsidy of Rs5,000 per acre. The minister added that in the Multan Division, 109 farmers are being given tractors under the campaign. He also noted that in the first phase of the Green Tractors Programme, 9,500 farmers had already received tractors. In the second phase, 20,000 more tractors will be distributed. Meanwhile, Phase 2 of the Chief Minister Punjab Kisan Card scheme is offering interest-free loans worth Rs100 billion. The maximum loan limit has been raised to Rs300,000, and landholding eligibility increased to 25 acres. Farmers can withdraw 30% of the loan in cash, while 20% is reserved for diesel. To support the scheme, 4,000 registered dealers and over 700 PSO fuel stations have been included in the network. The ceremony was also addressed by Secretary Agriculture Punjab Iftikhar Ali Sahoo. On this occasion, Minister Syed Ashiq Hussain Kirmani handed over keys of the green tractors to successful farmers. Copyright Business Recorder, 2025
