Islamabad: The government has revised the withholding tax on cash withdrawals by non-filers, raising both the tax rate and the exemption threshold under the Finance Bill 2025–26.
During a meeting of the National Assembly Standing Committee on Finance on Friday, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial clarified that the withholding tax rate on cash withdrawals by non-filers will be increased from 0.6% to 0.8%, while the exemption limit will be raised from PKR 50,000 to PKR 75,000 per day.
The change comes after the committee, chaired by MNA Naveed Qamar, argued that the existing threshold was too low. Qamar suggested increasing the limit to PKR 100,000, but a mutual agreement was reached between the committee and the FBR to cap it at PKR 75,000.
Langrial also addressed a confusion stemming from the federal budget speech, where the tax rate was mistakenly announced as 1%. He clarified that the proposed and correct rate is 0.8%.
Meanwhile, in discussions on salaried income taxation, Minister of State for Finance Bilal Azhar Kayani revealed that the Finance Bill had initially proposed a 1% tax on the PKR 600,000–PKR1.2 million income slab. However, the federal cabinet has since approved a 2.5% tax for this bracket, citing a 10% salary increase for federal government employees and limited fiscal space.
In addition, the Finance Bill proposes a slight reduction in super tax rates under Section 4C of the Income Tax Ordinance for income slabs between PKR 200 million and PKR 500 million, aiming to reduce the tax burden on compliant corporate entities.
Langrial also mentioned that recent amendments to banking tax provisions were made in consultation with the State Bank of Pakistan (SBP) and are geared towards greater disclosure and fair income assessment of banking companies.
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