Budget 2025-26: Govt proposes revised tax on cash withdrawal from ATM

ISLAMABAD: The Federal Board of Revenue (FBR) is expected to increase the tax-free cash withdrawal limit to Rs. 75,000 from Rs. 50,000 per day for non-filers, under the Finance Bill 2025-26, ARY News reported.

Earlier, non-filers were able to withdraw up to Rs. 50,000 without suffering an advance tax charge.

During a briefing to the National Assembly Standing Committee on Finance, FBR authorities proposed that, according to the new cash withdrawal limit, Rs. 75,000 will have a 0.8% withholding tax after withdrawal, raised from the earlier 0.6%. The step aims to promote adherence to tax laws and documentation.

Moreover, new tax measures for e-commerce businesses are yet to be introduced by the Finance Bill, imposing a 2% income tax on online clothing sales and 0.5% on electronics.

A 1% tax will be imposed on online businesses, other than clothing and electronics. Customer billing details will be required for registered e-commerce businesses to present as part of their tax returns.

The bill also suggests a 5% surge in advance tax on digital services, impacting platforms like Google, YouTube, and Facebook, raising the tax rate from 10% to 15%.

As part of new tax measures, the aim is to encourage digital companies to establish offices in Pakistan, with a decreased 5% tax rate for companies that set up local offices.

Banks and courier services will serve as authorised agents for tax collection, ensuring adherence to the new tax regulations.

Additionally, online businesses will be prohibited from imposing extra charges on customers for tax payments.

These initiatives are part of the government’s broader strategy to broaden the tax base and regulate digital commerce, thereby enhancing transparency in financial transactions.

Read More: Govt introduces digital tax law targeting social media and online businesses

The Government of Pakistan has introduced a new digital tax law that mandates taxation on earnings generated from YouTube, social media platforms, and various online services, ARY News reported.

According to reports, income derived from audio, video, and music streaming services will now be subject to tax, along with other digital sectors.

The legislation also applies to telemedicine, e-learning platforms, cloud services, and online banking in Pakistan.