PM's Order: No Tax Hike on Cash Withdrawals for Non-filers

PM's Order: No Tax Hike on Cash Withdrawals for Non-filers

Islamabad: In the lead-up to the 2024-25 budget, Prime Minister Shehbaz Sharif has turned down a proposal to increase the tax on cash withdrawals from banks for non-filers, as confirmed by Federal Board of Revenue (FBR) officials.

The proposal was meant to raise the tax rate to 0.9% for bank withdrawals exceeding Rs50,000 for non-filers.

Currently, non-filers are subjected to a 0.6% withholding tax on bank withdrawals above this threshold. The suggested hike was part of a broader strategy to generate additional revenue and was projected to bring in Rs20 billion from non-filers. However, the prime minister decided against the increase, prioritizing the potential financial burden on non-filers.

“Prime Minister Shehbaz Sharif has rejected the proposal to increase the tax on cash transactions for non-filers,” said FBR officials, highlighting the government's stance on maintaining the existing tax framework for these transactions. 

Following the PM's directive, FBR officials have been instructed to communicate this decision to the Finance Ministry, as it impacts the ongoing discussions related to fiscal policy and economic reforms.

Meanwhile, the Ministry of Finance has revealed initial proposals to increase salaries for government employees. Sources within the ministry suggest a potential salary hike of 15% to 20% for federal employees, though final decisions will be made by the PM after consultations with the Finance Ministry and the cabinet. 

One of the key proposals is an increase in the pay policy for bureaucrats. For officers up to grade 20, an increase from Rs65,000 to Rs105,000 has been proposed. For grade 21 officers, the salary is proposed to rise from Rs75,000 to Rs120,000. Grade 22 officers could see their salaries increase from Rs95,000 to Rs155,000.