The federal government has decided to impose a flat 0.6 percent tax on citizens not appearing on the Federal Board of Revenue’s (FBR) Active Taxpayer List (ATL) for cash withdrawals over Rs. 50,000.

The budget documents for 2023-24 revealed that this tax regime on cash withdrawals would help document the economy and increase the transaction expenditure of non-ATL individuals.

The government hopes that this move will attract more individuals into the tax net and broaden the tax base of the country.

This law existed previously but was repealed by the previous administration via the Finance Bill 2021. However, the government has decided to reinstate it and strictly enforce it in order to improve the country’s tax revenue.

The budget documents stated that some big measures taken under the Finance Act 2022 against the non-filers were not enforced adequately, and hence, the government has taken this step to ensure compliance.

The FBR’s ATL is a list of taxpayers who file their income tax returns and pay their due taxes within the specified time. The ATL confers various benefits and incentives to the taxpayers, such as lower withholding tax rates, exemption from certain taxes, and access to public contracts and services. The FBR updates the ATL every year based on the filing status of the taxpayers.