Pakistan Increases Tax-Free Cash Withdrawal Limit for Non Filers

 New Tax-Free Withdrawal Limit Announced

The Federal Board of Revenue (FBR) has increased the tax-free cash withdrawal limit for non-filers from Rs. 10,000 to Rs. 50,000 per day. This move aims to ease financial transactions for individuals who are not on the active taxpayers’ list but still need access to cash for daily expenses.

The decision comes as part of the government’s efforts to reduce financial burdens on the public while encouraging more people to join the tax net. Previously, non-filers faced strict restrictions on banking transactions, but this adjustment provides some relief.

 Why Was the Limit Increased?

 Easing Financial Pressure on Non-Filers

Many Pakistanis, especially small business owners and daily wage workers, operate outside the formal tax system. The previous Rs. 10,000 limit created difficulties in accessing cash for essential needs. The new Rs. 50,000 limit allows smoother transactions without excessive tax penalties.

 Encouraging Tax Compliance

While the government has relaxed withdrawal limits, officials emphasize that this is not a permanent solution. The FBR continues to push for greater tax compliance and urges non-filers to register and file returns to avoid future restrictions.

 Impact on the Economy

The increase in the tax-free withdrawal limit is expected to:

• Boost small business transactions

• Reduce cash flow problems for daily wage earners

• Encourage banking sector engagement among non-filers

However, critics argue that this move might reduce incentives for tax registration, as non-filers can now access higher amounts without penalties.

What Should Non-Filers Do Now?

While the new limit provides temporary relief, the FBR advises non-filers to:
✔ Register with the tax authorities
✔ File annual tax returns to avoid future restrictions
✔ Benefit from lower withholding taxes on banking transactions

 Final Thoughts

The increase in the tax-free cash withdrawal limit for non-filers is a balancing act—providing immediate financial relief while pushing for long-term tax compliance. Whether this leads to more people joining the tax system or further delays in documentation remains to be seen.

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