Islamabad: In significant move aimed at documenting economy and curbing outflow of foreign currency, Finance Minister Ishaq Dar in budget 2023-24 announced imposition of new tax measures. He said imposition of taxes on cash withdrawals plays crucial role in documenting economic transactions.

As part of this effort, government has decided to impose 0.6 percent tax on cash withdrawals exceeding Rs 50,000. This step is expected to encourage individuals and businesses to shift towards electronic transactions and formal banking channels. Furthermore, in order to discourage outflow of foreign currency through bank channels, government has revised Withholding Tax on Debit and Credit Card transactions. Existing WT previously set at 1 percent has now been increased to 5 percent.

This measure aims to discourage excessive use of foreign currency transactions and promote use of local currency within country. However, for non-filers, individuals who have not filed their tax returns, tax ratio will be even higher set at 10 percent

Published in The Daily National Courier, June, 10 2023

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