Tax imposed on bank transactions of both filers and non-filers
Starting July 1, the federal government has
begun taxing all types of bank transactions for both tax filers and non-filers,
triggering widespread frustration among bank customers as financial
institutions raise fees and enforce new withdrawal taxes.
Under the new tax rules, filers are now subject
to a 0.3% withholding tax on cash withdrawals exceeding Rs50,000 per day, while
non-filers face double that rate at 0.6%. Additionally, banks have increased
fees across the board, including ATM card charges, SMS alert fees, and fees for
using other banks’ ATMs, leading to rising tensions between customers and bank
staff.
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As of July 1, the ATM usage fee for
transactions at other banks has nearly doubled from Rs18 to Rs34 per
transaction. ATM card fees have surged by Rs700, and SMS alert fees have jumped
from Rs1,200 to Rs2,000, an increase of Rs800.
Non-filers also face a Rs522 deduction on
cheque withdrawals of Rs20,000 or more. Banks have imposed daily ATM withdrawal
limits: standard debit card holders can withdraw between Rs25,000 and Rs50,000,
premium cardholders up to Rs500,000, and foreign debit card users are limited
to the equivalent of $200 to $500 per day. Tax deductions will be applied
automatically on withdrawals exceeding Rs50,000 per day.
Furthermore, banks will now charge fees on
international ATM transactions based on either the exchange rate or a fixed
bank-determined fee.
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The introduction of these higher taxes and
fees has sparked significant dissatisfaction among customers, resulting in more
frequent disputes at bank branches. Banks have reportedly approached 1Link,
Pakistan’s payment system operator, to request a revision of the new fee
schedule.
Banking officials warn that these measures
could discourage formal banking activity, potentially driving more transactions
into the cash economy, which contradicts government efforts to broaden the tax
base and formalize financial flows.
Source: Express Tribune