What is withholding tax? Transaction tax is ok but it should be small.

I've totally abandon the use of banks recently in my business. Only cash. No point of paying tax to fund elite foreign tours and security protocol.

It is a good tax to keep an eye on the wealth of those who don’t pay tax but it should be modest.

Withholding tax is a way to finance corruption in Pakistan, meant to increase wealth of our corrupt politicians

@Indian .People in pakistan make lots of cash and dont pay taxes.They dont want to have a national tax number .so the gov decided to put tax on the cash you withdraw from your account incase if its above 50k.if you have a national tax number this does not imply.This is to bring our corrupt traders into the tax system by force.

This tax is to check undeclared circulation of money that most traders and businesses never disclose. It is minimal in amount but the the cry is all about disclosure which the business community is scared of.

@Tariq How much smaller then 0.6 % can you get? Also I am all for this tax. If you don't want to pay it then you should just file a tax return. That's practically all it takes. So I would like some one to ask these TAX EVADERS that call themselves TRADERS why won't they file a tax return if they don't want to pay the with holding tax?

More and more taxes to support VIP lifestyle of corrupt leaders... There should be new taxes on feudals and politicians not common man.

It's true that most of the payments are done by cash now, even though I have received a message from the person we buy products to pay all amount in cash rather than cheque. I agree, that it'll reduce transactions of black money and all the transactions done will be taxable, but they should give some relief somehow.

@Can Confirm It seems you never paid tax to start with because if you would have had you wouldnt worry about the new WHT. You also should know that the tax funds the military which is fighting a war against taliban. More than 50% of our money goes to fund army. I am a registered tax payer and I dont have to worry about 0.6 wht on bank transactions. So register and you dont have to worry about 0.6% wht.

@Tariq One can keep eye on wealth by only monitoring such accounts and make income tax raids if any ambiguity is found, there is no such need of imposing WHT on banking transactions, this act has eventually reduced banks deposit and in future there is a possibility that banks may cut the jobs; as interest rate is already low and WHT on banking transactions is icing on the cake.

The actual problem is not paying tax, it's registering yourself in tax net. We are tax filers and we know how difficult and cumbersome the tax net is. First of all its corrupt, secondly too many taxes and third the work which was to be done by FBR is being done by registered persons. We have to employ couple of persons just to complete tax returns and tax deduction of other parties and need to keep the record of others as well. We, as taxpayers/filers, are doing FBR job free of cost and also being haunted by FBR persons. So how could one get themselves registered by giving his neck to FBR. FBR is the most corrupt department which is formed only to haunt businessman.

Withholding tax on every thing from bank transactions and phone bills to electric and gas bills. Large purchases like a refrigerator and automobile is also subject to withholding tax. The irony is that this tax is being paid by a large majority which owes no tax at the end of the year. This is known knowledge that when filers file their tax return asking for refund of this "withholding" tax, they never receive the refund and it is simply held by the government for future adjustments. I would say that this is cruel step and must be withdrawn immediately. Instead the government should find other methods of enforcing annual tax filings.

I don't use Pakistani banks for any transaction over PKR 50,000 any more. I live abroad and support family back home. I just carry cash with me now. Its inefficient and insecure but I am not prepared to pay tax on my salary which is already fully taxed in the US. No matter how low this tax may be, I will not pay it as this tax, at least on my funds, is unjust.

@Can Confirm Its we (The salaried class) who are paying your share. You should be more responsible...

@M. Ahmed And what about corrupt business man who earn a lot, bribe the politicians and don't pay a single penny as tax. An mind you, this transaction tax is adjustable against your tax payable, i.e. you can claim refund.

File your tax return and save your self from the with holding tax. I do not find any reason by traders to oppose it since we need to document the economy and stop black money circulation in the market

Very true that go and register yourself as a tax payer if you do not want to pay this tax. But Alas, they don't want to register themselves as tax filers and don't want to pay this tax also

@Test Though some of your points has weight but sounds like you have no idea about business and the meninges of 'a transaction' or 'a withdrawal' and perhaps you do not even know that there is already this withholding on cash at smaller amount that is for Everybody including tax return filers.

@Z By law this tax should only occur on transactions above 50,000 r.s per day and should only apply to non-tax filers. Now if you are saying that this tax is also being applied to amounts below that or being applied to tax-filers then I am very much against this and people should protest it being applied on those who have already paid their taxes. However this does not mean the law should be withdrawn or is a bad one. Instead they should go after the people who are applying this law on tax-filers or those using less then 50,000 r.s.

With holding tax is not ideal, but like our country mostly traders are not willing to pay single peny tax. This tax should be implemented on banking transactions and CNIC number should be tracking for bring traders in tax net. A poor man does not do transaction per day of Rs. 50,000/= so there would be no impact on him, actually affect on middle and upper class who do daily banking transactions of Rs. 50,000/= and more.

@Test: I think you do not understand Pakistani economics. If Pakistan wants to collect proper tax, they should first impose tax on agricultural income (where one can earn 100 million without paying tax) and secondly Govt should make laws that any government office bearer (politician or bureaucrats), who lives beyond his known source of income, and cannot justify his wealth, should be sent to prison and their wealth should get confiscated. As for taxing withdrawal from bank, that is not only unjust but unproductive too. Any person with little bit of intelligence should understand that. For instance, if I am student and dad put 10 lac in my account, why I should be taxed if I want to withdraw that? If I am a women not working neither have tax number, and I inherit Rs 20 lac, why should I be taxed for withdrawing that money? Even if I have tax number and pay 10 lac to someone who has no tax number (as he may not need one), why he should pay tax when taking the money out? ... and so on.

>For instance, if I am student and dad put 10 lac in my account, why I should be taxed if I want to withdraw that? You don't need to, if you have tax number. That will help IT (Income Tax) people to track the money & find out if your dad has paid the income tax or not. Fair? >If I am a women not working neither have tax number, and I inherit Rs 20 lac, why should I be taxed for withdrawing that money? Get tax number & avoid Withholding tax. So IT people can track the funds to find out if income tax has paid or not. Fair again?? >Even if I have tax number and pay 10 lac to someone who has no tax number (as he may not need one), why he should pay tax when taking the money out? Why he *may* not need the tax number? If he is getting paid 10 lac then most probably it's his income. So he should pay the income tax as per the rule. And if he is not getting the tax number to avoid paying income tax then how it is fair??? Disclaimer: My reply is based upon the post by 'abdullah'

@Sabeeh Ahmad Spot On. This is precisely the issue!!

@Indian: How can you expect a student who is not working (maybe 10 or 22 years old), studying at school or college, should have national Tax number? ... such person is not required to have NT number. ... Same is true for women or girls, or even adult man, or even people earning nominal money (manual worker ... in Pakistan do not pay tax, because tax is only applicable on income over Rs 400,000 and they maybe earning less than Rs 200,000). As for one paying 10 lac to someone (as I wrote), I never wrote that I paid him for work or as payment. I might have given him (someone) money as loan, maybe loan to someone who has no income. Maybe, I paid a poor person who could not afford hospital treatment, to help him get hospital treatment. Now this person take loan or charity from me and pay tax on that loan or charity, what a farce system.

Traders can pay millions in ransom, but wont pay taxes?

This should not be removed at all, PML-N has taken a good decision to curb tax evasion. Moreover it's on 50,000 and above and who do not pay taxes. Now the poor middle class or lower middle class will seldom withdraw this much amount. People, who are withdrawing this amount regularly and eating up the bank interest (no matter how low) as well, need to introspect within themselves. Other option would be to simply provide the Taxpayer Registration number, while withdrawing the amount and amount not being deducted but simply being tracked.

This tax applies only to those who are not sales tax registered. I'm sorry but if the traders are not taxed then why should I as a professional or my company pay any direct income tax either. We are responsible for 70 percent of this countries taxes. Why? Why should just a certain class of society have to pay income and corporate tax and traders not even have to declare their incomes. We all need to pay our fair share of taxes otherwise who will fund important institutions like the Army Police Courts and many important parts government of govt machinery.

@Karachite sir you are simply unaware that Pakistan and USA have a double tax treaty and that there are no taxes in remittances. I suggest you spend more time researching the tax structure.

@Shazad I should highlight however that I do not believe the Withholding Tax is a complete solution. It is a good FIRST STEP though. Agricultural Feudal Lords should be taxed (in a way the ensures they do not pass the burden on to the poorer farmers). Government officials should also be taxed/arrested if they are corrupt and living beyond their means. But right now doing that is next to impossible as any action taken against such people ends up being buried in the courts, buried in bureaucracy or bribed/intimidated away. Do I wish it was different? Yes but right now taking concrete action such people would requires years of work, of restructuring departments, of investigations and trials and just as importantly YEARS of POLITICAL WILL & PRESSURE BY the government and ON the government. That will take time. So the WHT? It's a good thing as it brings all the wealthy & corrupt into the tax net. It is only the first step though and other steps will need to be taken after it.