The Council for Islamic Ideology (CII) has issued a clarification, stating that no final decision has been made regarding withholding tax on bank transactions.
The council emphasized that the matter was only discussed at a preliminary level, with members expressing differing opinions.
According to an official announcement, several members of the council shared their views on the issue in the last session. However, the body stressed that these discussions should not be taken as a final ruling.
The CII said it has directed that relevant financial and Shariah experts be consulted in the next meeting before any conclusive stance is adopted. A detailed review will be carried out once expert opinions are presented.
Earlier reports of withholding tax declared un-Islamic
Earlier, reports suggested that the CII had declared withholding tax on withdrawing or transferring money from banks as “un-Islamic.” During the previous session chaired by Allama Dr. Raghib Hussain Naeemi, members had noted that deducting tax on one’s own money appeared excessive and lacked justification in Shariah.
Dr. Naeemi was quoted as saying, “It is not permissible to deduct this amount in any way,” sparking headlines that the council had formally ruled against the practice.
FBR’s position
The Federal Board of Revenue (FBR), which collects withholding tax as part of its revenue measures, responded cautiously. During an informal media interaction at FBR headquarters, Chairman Rashid Mahmood Langrial said the matter would be reviewed before giving any official response.
However, insiders confirmed that the FBR has already prepared to challenge the council’s opinion, given the tax’s importance to government revenue collection.
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