Prime Minister Shehbaz has declined the proposal to raise withholding tax on cash withdrawals in the new budget.
Prime Minister Shehbaz Sharif has dismissed several major budget proposals put forth by the Federal Board of Revenue (FBR), which would have directly affected the general public by increasing inflation. One such proposal was to raise the withholding tax rate on cash withdrawals from banks by non-filers from 0.6 to 0.9 percent. Four proposals from the FBR, collectively impacting revenues between Rs. 150-200 billion, were rejected by the Prime Minister:
- The proposed increase in the withholding tax rate, estimated to generate an additional Rs. 20 billion in revenue for the fiscal year 2024-25.
- Taxation on pensions was also turned down.
- Rejecting a raise in the standard rate of sales tax from 18 to 19 percent, which would have had a revenue impact of Rs. 40-50 billion.
- Declining an 18 percent sales tax on petroleum products, with an estimated revenue impact of Rs. 30-40 billion.
