Government Plans Higher Taxes on ATM and Bank Withdrawals for Non-Filers
ISLAMABAD, 2025 — The federal government is planning to impose higher taxes on ATM and bank withdrawals made by non-filers, as part of its ongoing strategy to boost tax revenue and narrow the growing fiscal gap.
What’s Changing
According to official sources, the government is likely to increase the withholding tax on cash withdrawals for non-filers from 0.8% to 1.5%. This means that people who haven’t filed their tax returns will pay nearly double the tax whenever they withdraw money from their bank accounts.
If the proposal is approved, it could bring in an additional Rs30 billion in revenue during the second half of the current fiscal year (FY2025–26).
Why This Step Is Being Taken
Pakistan’s tax collection authority — the Federal Board of Revenue (FBR) — is currently struggling with a Rs200 billion shortfall against its target for the first six months of FY2025–26.
So far, the FBR has managed to collect Rs2,885 billion, while the goal was Rs3,083 billion.
To address this gap without introducing a formal “mini-budget,” the government is focusing on alternative revenue measures like higher taxes on non-filers.
IMF Discussions and Policy Direction
Sources revealed that this proposal was discussed with the International Monetary Fund (IMF) during recent review meetings. The government chose to make targeted changes that can raise revenue without placing an undue burden on current taxpayers rather than announcing a new mini-budget, despite the IMF’s encouragement for Pakistan to broaden its tax base.
Effects on Non-Filers
According to experts, this action accomplishes two main goals:
- Promoting tax compliance: The government increases the cost of non-filers to eventually bring more people into the taxpayer net.
- Revenue generation within immediate time — This step would help the FBR to meet its revenue targets for the remaining period of the year.
Analysts, however, warn that these steps could alienate ordinary people who are either unaware of their responsibility or face difficulties in working with the online FBR system.
Final Thoughts
The government’s move is a reflection of the increasing dependence on technology-based enforcement coupled with data-driven monitoring mechanisms for better compliance. However, experts suggest that the FBR should not restrict its efforts to penalizing the non-filers but focus on tax education, simplifying the filing procedures, and rewarding timely filers in order to achieve tangible and sustainable improvement.
If done well, it would mark one small but significant step closer to a wider and deeper culture of taxation in Pakistan.