UNISAME Condemns Cash Withdrawal Tax as Unjust and Punitive, Urges Immediate Repeal

In a stern statement, UNISAME President Zulfikar Thaver criticized the Federal Board of Revenue (FBR) for failing to consider equity and justice in its decision. Taxation must be levied on profits, not on savings or reserves. Bank deposits are already subject to a 20% withholding tax on interest earnings. Taxing the same money again upon withdrawal constitutes blatant double taxation—a practice devoid of any economic or moral rationale,”* he asserted.

Key Objections Raised by UNISAME

1. Regressive & Anti-Business Impact**

   – Small and medium enterprises (SMEs) frequently withdraw cash in bulk to pay suppliers and daily-wage laborers, who often lack access to digital payment systems.

   – Hospitals, emergency services, and many vendors refuse cheques and cards, forcing even ordinary citizens to maintain cash liquidity.

   – Rs. 50,000 is hardly a substantial amount—it cannot purchase machinery or durable goods. It merely provides basic liquidity for survival in a cash-dependent economy,”* Thaver emphasized.

2. Disproportionate Burden on SMEs & Common Citizens**

   – Large corporations and wealthy individuals predominantly use digital transactions, escaping the brunt of this tax.

   – The policy unfairly targets micro-entrepreneurs, daily wage earners, and small traders who rely on cash for essential transactions.

3. Lack of Stakeholder Consultation**

   – UNISAME questioned whether the FBR conducted a proper cost-benefit analysis or consulted industry stakeholders before implementation.

   – We are at a loss to understand the wisdom behind this move. Were the severe repercussions on SMEs and the informal workforce even considered?”* Thaver remarked.

Call for Immediate Review

UNISAME has formally urged the FBR to repeal or revise this punitive tax, warning that it stifles economic activity, discourages banking inclusion, and exacerbates financial hardship for low-income groups.

Instead of squeezing the already struggling SME sector, the FBR should focus on broadening the tax net by targeting untaxed sectors and curbing evasion by elite taxpayers, Thaver concluded.