In a major transfer aimed toward documenting the financial system and curbing the outflow of international forex, Finance Minister Ishaq Dar in Finances 2023-24 introduced the imposition of latest tax measures.
Finance wizard stated the imposition of taxes on money withdrawals performs a vital position in documenting financial transactions. As a part of this effort, the federal government has determined to impose a 0.6% tax on money withdrawals exceeding Rs50,000.
This step is predicted to encourage people and companies to shift in direction of digital transactions and formal banking channels.
Moreover, as a way to discourage the outflow of international forex by way of financial institution channels, the federal government has revised the withholding tax on Debit and Credit score Card transactions. The prevailing withholding tax, beforehand set at 1%, has now been elevated to five%.
This measure goals to discourage extreme use of international forex transactions and promote using native forex throughout the nation. Nevertheless, for non-filers, people who haven’t filed their tax returns, the tax ratio might be even larger, set at 10%.
These tax measures replicate the federal government’s dedication to strengthening the formal financial system and lowering the reliance on money transactions. By encouraging digital transactions and rising the tax burden on international forex outflows, the federal government goals to advertise transparency, improve the documentation of financial actions, and finally enhance the general financial progress of the nation.
