Finance Minister Ishaq Dar announced the implementation of new tax measures in the Budget 2023–24, which was a significant move intended to track the economy and stop the outflow of foreign currency. According to the finance wizard, taxes on cash withdrawals are extremely important for recording economic transactions. The government has chosen to impose a 0.6% tax on cash withdrawals above Rs 50,000 as part of this initiative. This action is anticipated to encourage people and companies to switch to conventional banking channels and electronic transactions.
Additionally, the government revised the withholding tax on debit and credit card transactions to deter the outflow of foreign money through bank channels. The existing withholding tax, which was previously fixed at 1%, is now 5%. This policy tries to promote the use of domestic currency domestically and discourage the overuse of foreign currency. The tax rate will be much higher—10%—for those who haven’t filed their tax forms, or “non-filers.”