ISLAMABAD: The Federal Board of Revenue (FBR) has decided to contest the Islamic Ideology Council’s (CII) recent verdict regarding withholding tax. The council recently ruled that collecting tax on bank withdrawals and transfers is against Islamic principles. Sources confirmed that all legal preparations have been finalized, and the case will soon be taken to court.
On Wednesday, under the leadership of Allama Dr. Raghib Hussain Naeemi, the CII announced its decision. The council concluded that deducting withholding tax from an individual’s personal bank withdrawals or transfers is both excessive and un-Islamic.
CII’s Standpoint
Dr. Naeemi explained that the matter was carefully examined within the framework of the Quran and Sunnah. He emphasized that there is no justification in Shariah for taxing citizens on their own money. According to him, “It is not permissible to deduct this amount in any way.” The ruling has sparked a strong debate across financial and legal circles, highlighting tensions between religious interpretations and fiscal policies.
FBR’s Position
During an informal interaction with journalists at FBR headquarters, Chairman Rashid Mahmood Langrial avoided giving a direct answer on the ruling. He stated that the matter would be thoroughly reviewed before any official statement is made. Despite this, reliable sources disclosed that the FBR has already resolved to challenge the council’s decision in court.
Withholding tax continues to serve as an important revenue stream for the government. Officials believe that removing this tax could negatively affect revenue generation, making it harder to maintain fiscal stability. Consequently, the FBR is determined to defend its stance, even as pressure grows from religious authorities.
Conclusion
The upcoming legal battle between the FBR and CII highlights the complex balance between financial policy and Islamic jurisprudence. The court’s verdict will determine whether withholding tax remains in place or is permanently removed. This decision will significantly influence both government revenue and public perception regarding the fairness of Pakistan’s taxation system.
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