ISLAMABAD: Pakistan’s Council of Islamic Ideology (CII) on Wednesday declared that withholding tax on cash transfer and withdrawal is an “excess,” declaring it as “un-Islamic.”
Withholding tax (WHT) is an advance payment of tax deducted at the time of economic activities specified under certain sections of Pakistan’s Income Tax Ordinance, 2001 and Sales Tax Act, 1990.
WHT on cash withdrawal or transfer is a tax that the bank automatically deducts on behalf of a customer when they withdraw money or transfer funds from their account. This tax is then deposited with the government on the person’s behalf.
“The council declared the withholding tax imposed on cash withdrawal or transfer to be an excess and therefore un-Islamic,” the CII said in a press release following its 243rd meeting.
The CII is a Pakistani constitutional body that advises the government on whether laws are compatible with Islam or not. The CII meeting was chaired by the body’s head, Dr. Muhammad Raghib Hussain Naeemi and other members of the council.
Other matters were also discussed during the meeting, such as the permissibility of the use of insulin containing pig-derived ingredients by diabetic patients.
“The council resolved that when insulin prepared with permissible (halal) ingredients is available, the use of insulin containing pig-derived ingredients should be avoided,” the press release said.
The council also considered a request from the religion ministry and agreed that a ringtone instructing citizens to respect banners, flags and buntings bearing sacred words and inscriptions during the Islamic month of Rabi Al-Awwal, will be prepared.