Cash withdrawal via ATM is going to be taxed heavily.
It is no surprise that the government of Pakistan has missed its tax target as usual this FY, like the rest of the FY. However, many experts said that this year's tax target was way too unrealistic due to no major tax expansion, and all the burden was on the existing taxpayers. However, FBR still tried alternative methods like illegal notices to leech more taxes. FBR is finding it hard to convince the IMF because they do not trust any of FBR's figures or numbers. Now the IMF has demanded to expand the tax net, and the FBR is under pressure to implement it. However, some experts said that the FBR was right about lowering taxes on property because they knew people would be taking their money out of Pakistan if the taxes were higher and there was no profit in the real estate business. Additionally, it happened the same way FBR did, as 50% of property transfers were dropped due to extra taxes, which is why people opted for alternative transfer methods like power of attorney, and people sold their property so that they could send this money outside of Pakistan to buy properties like the UAE or the UK.
The FBR is now suggesting taxing those people who use debit cards to withdraw cash. A 1.2% tax will be implemented; for example, if a person is taking out 120,000 PKR, then the deduction will be 1200 PKR. It is expected that the number of taxes will be increased, as the FBR is also suggesting increasing taxes on cars and introducing GST on cars, which will be 18% on local manufacturing. The IMF has urged the FBR to allow 5 old car imports, which were stopped by the FBR to save forex reserves and make local industry competitive. The IMF think-tank suggests that allowing 5-year-old car imports in Pakistan will allow Pakistan to collect more taxes. Pakistan is also thinking of increasing the levy on petrol items by more than 100 PKR, which will make things or goods more expensive in Pakistan. It is also expected that those people who are living on pensions will also face 2% taxes as well.
