Why You Can’t Withdraw Cash From Your Bank

Proposed New Law Cash withdrawal Limit
Key Proposals in the Tax Laws (Amendment) Bill, 2024
1. Eligibility for Financial Transactions (Section 114C)
Objective: Ensure individuals and entities engaging in financial transactions have sufficient declared resources.
Criteria for Eligibility:
Individuals must declare at least 130% of cash and cash-equivalent assets in their most recent wealth statement.
Companies and associations of persons must align their transactions with financial statements submitted in their latest tax returns.
Restricted Transactions for Ineligible Persons:
Booking, purchasing, or registering motor vehicles.
Transferring immovable property exceeding FBR-notified values.
Conducting transactions involving securities, mutual funds, or debt instruments.
Opening or maintaining non-Asaan bank accounts or withdrawing cash beyond FBR-specified limits.
2. Exceptions to Restrictions
Certain transactions are exempt, including:

Purchases of rickshaws, motorcycle rickshaws, tractors, or pickup vehicles with engine capacities up to 800cc.
Investments in securities within specified limits.
Transactions by non-residents or public companies, except those involving excessive cash withdrawals.
Transactions supported by declared inheritance or loans in tax returns.
3. Exchange of Banking and Tax Information
High-Risk Individuals:
The FBR is authorized to share tax data and algorithms with banks to identify discrepancies in account holders’ financial profiles.
Banks must provide details of accounts that deviate from declared financial data.
Concerns:
Lack of clarity on identifying "high-risk" individuals raises potential for misuse or arbitrary decisions.
4. Enhanced Enforcement Powers for FBR
Sales Tax Act, 1990:
Introduces an automated risk management system to restrict or defer input tax adjustments beyond 90% of output tax.
Risk parameters remain undefined, causing uncertainty about implementation.
Additional Commissioner Powers:
Commissioners can restrict bank accounts or immovable property transfers for non-registered individuals. Restrictions can be lifted within two working days of registration.
Appeals must be filed within 30 days, but the appellate process lacks independence, raising concerns about fairness.
5. Coercive Measures for Non-Compliance
Chief commissioners are empowered to:
Seal business premises.
Seize movable property.
Appoint receivers to manage taxable activities.
Safeguards: Due diligence and the right to a hearing are mandatory before these actions are taken.
Concerns:
These powers may lead to business disruptions, negative sentiment among taxpayers, and potential misuse if not strictly regulated.
Constitutional and Legal Considerations
Article 10A: Guarantees the right to a fair trial, requiring independent and impartial judicial forums for appeals.
Articles 18, 23, and 24: Protect the right to trade, business, and property ownership. The proposed measures must align with these constitutional rights to avoid overreach.
Excise Duty Amendments
Sections 26 and 27 of the Federal Excise Act, 2005:
Seizure and confiscation powers for goods without valid tax stamps, banderoles, stickers, or barcodes.
Positive step for promoting documentation but may increase compliance costs for businesses.
Implementation Challenges
Stakeholder Preparedness:

Successful implementation depends on the readiness of businesses, FBR, and other administrative bodies.
Lack of consultation may hinder smooth adoption.
Increased Costs:

Businesses will face additional compliance costs due to these measures.
Administrative costs for enforcement will also rise.
Resource Constraints:

Effective implementation requires sufficient resources and infrastructure, areas where past initiatives have often fallen short.
Risk of Legal Complexities:

Ambiguities in definitions and procedures could lead to legal disputes and delays.
Conclusion
The Tax Laws (Amendment) Bill, 2024 introduces significant measures to broaden Pakistan’s tax base, enforce compliance, and promote transparency. While these amendments aim to address systemic weaknesses, their success depends on careful planning, clarity in procedures, and safeguards against misuse of authority. Balancing enforcement with taxpayer facilitation and ensuring adherence to constitutional protections will be critical for fostering trust and achieving the bill’s objectives.
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