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FBR Proposes Doubling Withholding Tax on Non-Filers’ Bank Withdrawals
FBR proposes increasing withholding tax on bank withdrawals by non-filers from 0.6% to 1.2%. New restrictions to take effect in Finance Bill 2025-26 to tighten tax net.
ND
by News Desk
2025-05-31
FBR Proposes Doubling Withholding Tax on Non-Filers’ Bank Withdrawals

The Federal Board of Revenue (FBR) has proposed to double the withholding tax rate on cash withdrawals by non-filers — individuals who do not submit income tax returns — from 0.6% to 1.2%.

According to a report by Business Recorder, the move is part of the government’s broader strategy to discourage undocumented financial activity and compel more citizens to file their taxes. The proposed changes are expected to be implemented through the Finance Bill 2025-26.

Currently, non-filers are taxed at a rate of 0.6% if they withdraw more than Rs 50,000 in a single day through ATMs or credit cards. The proposed revision would see this rate increased to 1.2%, applicable to the full withdrawal amount, not just the excess.

The government is also considering abolishing the entire non-filer category from July 1, 2025, which would mean individuals not on the Active Taxpayer List (ATL) would be barred from carrying out any major financial transactions.

Additionally, the FBR plans to begin sharing income tax return data with banks to streamline the identification of non-filers. This initiative is part of a series of aggressive tax reforms under the proposed “Tax Laws (Amendment) Bill 2024,” which has already been approved by the National Assembly’s Standing Committee on Finance and Revenue.

Officials say these measures aim to clamp down on tax evasion and bring transparency to the financial system, ensuring that all income earners contribute their fair share to the national exchequer.

 
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FBR

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NonFilers

PakistanBudget

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