KARACHI: The government has given a relief to branchless banking sector through exemption of withholding tax on cash withdrawal for agents associated with branchless banking companies.
Accordingly, agents could save their amount from deduction from the account maintaining in their microfinance/commercial banks.
The exemption of withholding tax had been a long pending demand from branchless banking companies because the requirement of the cash is inevitable to agents who used to suffer extra cost while paying additional tax on the withdrawals of above Rs 50,000.
In order to promote digital payments in the country and to assist in the realization of the long term vision of Universal Financial Inclusion in Pakistan, exemption is being accorded to branchless banking agents operating under the Asaan Mobile Account Scheme from withholding tax on cash withdrawals made for the purpose of making payments to their respective customers.
At present, tax at the rate of 0.3 percent and 0.6 percent is deducted upon aggregate cash withdrawals exceeding Rs.50,000 per day from filers and non-filers respectively.