ISLAMABAD: The federal government has begun collecting higher taxes on banking transactions, with non-filers now facing additional deductions when withdrawing cash from banks or ATMs.
According to official sources, the withholding tax rate on cash withdrawals by non-filers has been increased from 0.6 percent to 0.8 percent. This means that a non-filer withdrawing Rs. 50,000 will now face a deduction of Rs. 600 instead of Rs. 400 previously.
Banks have also revised their schedule of charges, increasing fees for ATM cards, SMS alerts, and interbank ATM transactions. Officials from the State Bank of Pakistan stated that these changes were implemented by 1LINK, the national interbank payment network.
The fee for using another bank’s ATM has risen from Rs. 23 to Rs. 34 per transaction, while the annual ATM card fee has been increased by Rs. 700. Similarly, the SMS alert service fee has jumped from Rs. 1,200 to Rs. 2,000. Withdrawals made over the counter through cheques will now also be subject to taxation, with non-filers withdrawing Rs. 20,000 facing a deduction of Rs. 522 in taxes.
Daily withdrawal limits have also been revised. Standard debit card holders may now withdraw between Rs. 25,000 and Rs. 50,000 per day, while premium card holders can withdraw up to Rs. 500,000 daily. Holders of foreign debit cards are permitted to withdraw the equivalent of USD 200 to 500 per day.
Any transaction exceeding Rs. 50,000 in a single day will automatically trigger tax deductions. Additionally, international ATM withdrawals will incur either a fixed fee or a percentage-based charge, depending on the issuing bank’s policy.
Bank customers across the country have expressed frustration over these changes, leading to an increase in disputes between customers and bank staff. In response, several banks have approached 1LINK to review the newly implemented schedule of charges.
With the implementation of the 2025–26 federal budget, the financial burden on the general public has visibly increased. Rising taxes and service charges have added to the concerns of ordinary citizens, and experts warn that such measures may discourage digital banking and promote a return to cash-based transactions.
