[netizen]

Central Board of Revenue (CBR) has directed all commercial banks and financial institutions of the country that 0.1 per cent withholding tax collected on cash withdrawal exceeding Rs25 thousands must be deposited in federal treasury within 7 days of collection.

CBR in its letter addressed to all banks and financial institutions further said this collection of 0.1 per cent withholding tax must be started from July 1, 2005.

CBR has further warned that any violating "person" of bank branch would face action from income tax department under section 161 of income tax ordinance.

CBR has further directed banks that "immediate instructions be issued to all branches of banks to start collection and deduction of cash withdrawal tax".

The direction of CBR further said, "the bank shall debit the accounts by an amount equivalent to 0.1 per cent of the payment every time a cash withdrawal is made".

CBR said this provision of tax would not apply to federal and provincial government, foreign diplomats and their missions in Pakistan, a person who produces a certificate from commissioner of income tax that his income during the tax year is exempt.

Note : Lets discuss the above new step from Pak govt to bring people in documented economy. In ur view, will it work or will it force people to keep thier savings out of banks, hence making Pakistan a paradise for looters ? Or do u think this step would discourage people dealing in grey market ?