CII clarifies no final decision yet on withholding tax

 

ISLAMABAD: Just hours after reports suggested that the Council of Islamic Ideology (CII) had declared withholding tax on bank withdrawals and transfers to be un-Islamic and unjust, the council has clarified that no final decision has been made on the matter.

In a statement, the CII explained that only a preliminary discussion took place during its recent meeting, chaired by Allama Dr. Raghib Naeemi, where members expressed differing views. It added that expert consultation will be sought before a conclusive stance is adopted, and the matter will be taken up again in the next session.

The council also directed that today’s press release include this correction to avoid any misunderstanding.

Earlier, the Council of Islamic Ideology (CII) had declared that withholding tax on bank withdrawals or transfers is un-Islamic and amounts to unjust excess, calling for its urgent reconsideration under Islamic principles.

The decision was made during a meeting chaired by Allama Dr. Raghib Naeemi, where the council also deliberated on a range of other legal and religious issues, including human milk storage institutions, amendments to the Diyat law, respect for sacred texts, public awareness measures and withholding tax.

The Council of Islamic Ideology stated that institutions for human milk storage can be established following proper legislation, provided they operate under specific conditions, and stressed that the council should be included in lawmaking related to such matters.

Regarding the proposed amendments to the Diyat law, the CII expressed strong opposition. It insisted that the Sharia-defined quantities of gold, silver, and camels must remain part of the law, rejecting the removal of silver and the adoption of non-Islamic measures for gold.

On another matter, the Council of Islamic Ideology recommended that copies of the Holy Quran kept for judicial purposes should be purified after use, with proper legislation enacted to ensure this.

The CII also urged citizens to respect banners, flags, and insignia bearing sacred Islamic phrases, calling for measures to prevent their desecration. For public awareness, the council suggested developing mobile phone ringtones containing such guidelines.

The Council of Islamic Ideology meeting concluded with a call for all measures to be implemented in accordance with Islamic principles and societal welfare.

Also Read: Withholding Tax Certificate: A step-by-step guide for download

A Withholding Tax Certificate in Pakistan is an essential document that confirms tax deductions made at source.

It acts as proof of tax withheld on various income types—such as salaries, contracts, or financial services and plays a key role in filing annual tax returns or claiming tax credits with the Federal Board of Revenue (FBR).

According to the FBR, under Section 164 of the Income Tax Ordinance, 2001, every withholding agent (such as employers, banks, or service providers) is legally required to issue a certificate to the person from whom income tax has been deducted.

This certificate serves as verifiable evidence that the tax amount has been collected and deposited.

FBR further clarifies that the Withholding Tax Certificate must be attached with the income tax return during submission to validate payment and avoid discrepancies or penalties.