The Federal Board of Revenue (FBR) has decided to challenge the Islamic Ideology Council’s (CII) recent decision declaring the collection of withholding tax on bank withdrawals and transfers as un-Islamic.
Sources confirmed that all legal preparations have been completed, and the matter will be taken to court.
On Wednesday, the CII, under the chairmanship of Allama Dr. Raghib Hussain Naeemi, ruled that deducting withholding tax on withdrawing or transferring one’s own money from banks is “excessive and un-Islamic.”
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Dr Naeemi stated that the council examined the issue within the framework of the Quran and Sunnah, concluding there was no justification in Shariah for taxing individuals on their own money.
“It is not permissible to deduct this amount in any way,” he explained.
FBR’s position
When asked about the council’s decision during an informal media interaction at FBR headquarters, Chairman Rashid Mahmood Langrial refrained from giving a direct response, saying the matter would be reviewed before any official stance is announced.
However, insiders revealed that the tax authority has already decided to challenge the ruling, as withholding tax remains a significant source of government revenue.
