The Federal Board of Revenue (FBR) has proposed a 100% increase in the withholding tax on cash withdrawals by non-filers, raising the rate from 0.6% to 1.2% in the upcoming federal budget.
This move is part of the government’s broader strategy to pressure non-filers into joining the tax net by making it more difficult for them to conduct financial transactions.
As per sources, the government is also considering eliminating the non-filer category altogether from July 1, 2025. If implemented, individuals who do not file tax returns may be barred from carrying out any financial transactions.
The Standing Committee on Finance and Revenue has approved the Tax Laws (Amendment) Bill 2024, which includes strict measures targeting non-filers. These changes are expected to be included in the Finance Bill 2025-26.
Currently, individuals who withdraw over Rs 50,000 in a single day are taxed at 0.6% if they are non-filers. Under the new proposal, this rate would rise to 1.2%, effectively doubling the burden on such transactions.
