The Government of Pakistan has officially revised the ATM Cash Withdrawal Tax 2025, increasing the rate and threshold for non-filers under the Finance Act 2025. This new rule directly impacts cash withdrawals made through ATMs and bank counters across the country.The updated system aims to encourage tax compliance, reduce untracked cash circulation, and push more citizens to become Active Taxpayers (filers) under the FBR system.
| Category | Details |
|---|---|
| Tax Type | ATM Cash Withdrawal Tax |
| Applicable Year | 2025 |
| New Rate | 0.8% (for non-filers) |
| Daily Limit | Rs 75,000 |
| Filers | Exempt from this tax |
| Source | Finance Act 2025 – FBR Pakistan |
What Changed in ATM Withdrawal Tax 2025
The Finance Act 2025 introduced two major changes to the withholding tax on cash withdrawals in Pakistan. These changes mainly affect non-filers, while filers remain exempt.
- Tax rate raised from 0.6% to 0.8% for non-filers
- Threshold increased from Rs 50,000 to Rs 75,000 per day
- Filers continue to enjoy 0% tax rate on all withdrawals
The government’s objective is clear — to promote the formal banking system and minimize unrecorded cash transactions.
Why the Government Increased the ATM Tax
The new ATM cash withdrawal tax policy 2025 is designed to create a more transparent economy by encouraging digital transactions and reducing cash hoarding.
- Broaden Pakistan’s tax base by bringing more people into the filer category
- Limit cash-based dealings that escape documentation
- Encourage citizens to use bank transfers and digital wallets instead of cash
These fiscal adjustments also reflect inflation trends and the government’s commitment to financial transparency.
How the Tax Applies: Filers vs Non-Filers
Under the ATM Cash Withdrawal Tax 2025, your filer status determines how the tax is applied. The system checks whether you are listed on the FBR Active Taxpayers List (ATL).
- Filers (ATL): Exempt from this tax regardless of withdrawal amount
- Non-filers: 0.8% tax applies on total daily withdrawals exceeding Rs 75,000
- Both ATM and in-branch cash withdrawals are aggregated for this calculation
For example, if a non-filer withdraws Rs 100,000, only Rs 25,000 is taxable, resulting in a deduction of Rs 200.
Exemptions and Special Cases
Certain withdrawals remain exempt from this rule to protect genuine financial flows and remittances.
- Accounts funded solely by foreign remittances (if properly documented)
- Branchless banking accounts under specific FBR rules
- Filers’ accounts under the Active Taxpayers List remain fully exempt
This ensures that expatriates and compliant taxpayers aren’t unfairly burdened under the updated Finance Act 2025.
Aggregation of Withdrawals Explained
The FBR’s new rules clarify that all cash withdrawals in a single day — whether through ATMs or bank branches — are combined before applying the Rs 75,000 threshold.
- Multiple ATM transactions in one day are added together
- Withdrawals from different branches of the same bank also count
- Once total daily withdrawals cross Rs 75,000, tax is automatically deducted for non-filers
This prevents non-filers from splitting withdrawals to avoid taxes.
Impact of ATM Tax 2025 on Filers and Non-Filers
The new ATM tax policy affects both groups differently. It adds cost for non-filers while rewarding filers with full exemption.
- Non-filers: Face higher withdrawal costs and data tracking by FBR
- Filers: Enjoy smoother banking and zero withholding tax
- Banks: Play a key role by automatically deducting and reporting transactions
This approach aims to push more people toward filing income tax returns and joining the documented economy.
What This Means for Pakistan’s Banking System
The ATM cash withdrawal tax 2025 supports the government’s digital economy roadmap. By discouraging excessive cash use, Pakistan can expand electronic payment systems and improve transparency.
- Encourages use of digital wallets and online banking
- Strengthens monitoring of financial flows
- Builds a sustainable, transparent fiscal framework
This policy aligns with broader efforts to modernize Pakistan’s financial sector under FBR reforms 2025.
Conclusion
The revised ATM Cash Withdrawal Tax Pakistan 2025 sets a 0.8% withholding tax for non-filers withdrawing more than Rs 75,000 daily, while filers remain exempt. It’s a clear message from the government to join the tax system, reduce untracked cash transactions, and support financial transparency.For official details, visit the Federal Board of Revenue (FBR) website at https://www.fbr.gov.pk or contact your bank branch for guidance on daily withdrawal limits and exemptions.
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