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The Federal Board of Revenue (FBR) has rejected a proposal to increase the withholding tax on cash withdrawals from banks for non-filers. The proposal suggested imposing a 0.9% tax on cash withdrawals exceeding Rs 50,000.
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According to sources, the Prime Minister has disapproved the proposal to increase tax on cash transactions. The government had planned to collect Rs 20 billion from non-filers through this tax. Currently, a 0.6% withholding tax is applicable on cash withdrawals exceeding Rs 50,000 for non-filers.
The rejection of the proposal is seen as a relief for non-filers, who would have faced an additional tax burden on their cash withdrawals. The FBR’s decision is expected to boost cash transactions and encourage people to use banking channels.