by Lately, social media and headlines have circulated alarming claims that Pakistan’s government is now imposing a tax on every bank deposit and transfer. But the truth is much more focused:
- The government has not introduced a general tax on all deposits or transfers.
- Instead, as of July 1, 2025, a withholding tax (WHT) applies specifically to large cash withdrawals made by non‑filers—not to standard deposits or digital transfers.
🏦 What’s Actually Being Taxed?
1. Cash Withdrawals by Non‑filers
- Withdrawal threshold: Daily cash withdrawals over Rs 50,000 are taxed.
- Rate: Increased from 0.6% to 0.8% for non‑filers of tax returns.
- Filers (i.e., those on the Active Taxpayers List): Exempt from this WHT.
- Applies to combined withdrawals across all accounts in a single day.
2. Profit on Bank Deposits
- Withholding tax on interest (profit on debt) has been increased:
- For filers: From 15% to 20%.
- For non‑filers: From 35% to 40%.
🧾 What’s Not Taxed
- Online or internal bank transfers (e.g., branch-to-branch, mobile transfers).
- Cheque payments or deposits—no new tax here.
- ATM transfers or digital card transactions—these remain outside the WHT scope.
- Govt’s Latest Financial Step: Tax on Every Bank Deposit & Transfer.
🎯 Why It’s Being Done
- Broadening the tax base under IMF conditions—bringing unregistered/non‑filer cash users into the system.
- Cushioning digital banking and transparency over undocumented cash use.
- Increasing government revenue to meet a projected Rs 14 trillion tax target for FY2025–26.
🌐 Broader Tax Pushes in Budget 2025–26
It’s not just cash withdrawals:
- Higher WHT on interest income and digital/foreign vendor transactions (especially cross-border e-commerce, 5–10% tax).
- New taxes on e-commerce and courier transactions, including 5% on cash-on-delivery, and 2% via payment intermediaries.
- GST increases on small-engine vehicles, petrol/diesel cars, and adjustments in capital gains & super tax. Govt’s Latest Financial Step.
📌 Key Takeaways for Your Finances
| Your Profile | Impact |
|---|---|
| Filer | ✅ No WHT on cash withdrawals ≤ Rs 50k; ✅ Lower interest tax (20%). |
| Non‑filer | 💰 WHT 0.8% on cash withdrawals > Rs 50k; 💰 Higher interest tax (40%). |
| Online banking user | 🚫 No impact—transfers & deposits unaffected. |
| Investor in savings | ✅ Expect higher withholding tax on interest earnings. |
🚶 Action Steps You Should Take
- Ensure you’re registered & filing taxes to enjoy exemptions and lower taxes.
- Plan large cash withdrawals to stay under thresholds or use documented means.
- Review bank statements for WHT deductions on interest/income.
- Consider digital or cheque transfers over cash for high-value outgoing funds.
- Stay informed—these changes are part of a broader fiscal shift tied to the IMF and upcoming budgets.
✅ Final Thoughts
The narrative of a blanket “tax on every bank deposit and transfer” is inaccurate. The reality is a targeted push by the government to bring non-filers into the tax net, discourage large undocumented cash use, and tax passive income more strictly.
If you’re a tax filer, your routine banking remains unaffected. But if you’re a non-filer, you’re now facing clearer consequences—every withdrawal above Rs 50,000 incurs a fast-track tax.
