In a bid to raise the federal government’s revenues, Islamabad has reportedly begun taxing all bank transactions. According to reports, the taxes were levied at the start of fiscal year (FY) 2025-26 and apply to transactions for both filers and non-filers.

 

As per reports, the federal government has raised the tax rate on tax withdrawals made by non-filers. Moreover, filers have also been reportedly slapped with a withholding tax on cash withdrawals if they exceed Rs50,000 in 24 hours. 

 

Data from reports indicates that filers will now face a 0.3 percent tax on all cash withdrawals exceeding Rs50,000. Non-filers will face a higher rate of 0.6 percent on similar cash withdrawal transactions.

 

Reports claim that non-filers withdrawing Rs20,000 or more via a cheque will face a flat charge of Rs522. As per the details, commercial banks have also set withdrawal limits for ATM users allowing debit card holders to withdraw only Rs50,000 per day, with premium cardholders able to withdraw Rs500,000 per day.

 

However, it merits a mention that news reports with conflicting information have been published, suggesting that filers will be exempt from the aforementioned 0.3 percent tax rate on cash withdrawals exceeding Rs50,000. 

 

Moreover, some reports claim that not all bank transactions will be taxed, suggesting that only cash withdrawals by non-filers will be subject to taxation. However, the government has not yet issued a formal statement on the matter, resulting in the spread of both confusion and misinformation. 

 

Commercial banks have reportedly hiked their fees, including charges for using other banks’ ATM’s, getting SMS alerts, and the issuance of ATM cards. According to reports, the higher fees have resulted in escalating tensions between customers and bank staff.

This is because the ATM card fee has been raised by Rs700, along with the SMS alert service charges being increased by Rs800, jumping from a reasonable Rs1,200 to Rs2,000. Moreover, customers are now facing a charge of Rs34 on cash withdrawals made from ATMs of banks for which they do not have an account.

The hike in fees is likely to deter new customers from being part of the formal financial space in Pakistan. Currently, only 64 percent of adult Pakistanis have a bank account, and this figure is projected to rise in the near future, but with rising charges, this figure is likely to witness stunted growth.