The Council of Islamic Ideology (CII) issued a clarification on Wednesday, stating that no final decision has been made regarding the status of withholding tax on money withdrawals and transfers. The clarification comes after earlier reports suggested the council had labelled the tax as “un-Islamic” during its 243rd meeting held under the chairmanship of Allama Dr Muhammad Raghib Hussain Naeemi.
Initial Comments Misinterpreted as Final Decision
In the initial press release, the CII described the withholding tax on financial transactions as “excessive” and said it was not in line with Islamic principles. This created a public impression that the council had issued a final ruling on the matter. However, a later clarification from the council emphasized that discussions during the meeting were preliminary.
“A few members discussed the issue and shared differing views,” the CII said in its follow-up statement. “They agreed to consult with subject-matter experts and revisit the topic in the next meeting. Therefore, the council has not made any formal decision on the matter yet.”
The Federal Board of Revenue (FBR) defines withholding tax as an advance tax collected during various financial transactions under the Income Tax Ordinance, 2001, and the Sales Tax Act, 1990.
CII Weighs In on Diyat Law, Supreme Court Ruling, and Other Issues
Apart from the withholding tax issue, the CII discussed various matters, including proposed amendments to the diyat (blood money) law. The council rejected the amendment bill that sought to remove silver as a standard and standardize gold as the only basis for diyat, calling it “un-Islamic.” The council insisted that the Islamic parameters — gold, silver, and camels — must remain in the law.
The council also expressed serious concerns over a recent Supreme Court verdict dated September 11, 2025. The court had ruled that a woman’s right to maintenance (Nafaqa) does not depend on whether the marriage was consummated or if the bride had physically moved in with her husband. The CII responded that making iddah (waiting period) and maintenance mandatory in non-consummated marriages contradicts the Quran and Sunnah.
Other decisions from the meeting included a recommendation to develop a ringtone reminding citizens to respect flags and banners with holy inscriptions during Rabbiul Awwal. The council also approved the establishment of human milk storage facilities under strict regulatory conditions, stating that new legislation would be needed and that CII should be part of the legislative process to prevent misuse.
Final Discussion on Withholding Tax Still Pending
The CII reiterated that the withholding tax issue would be discussed again in upcoming sessions. Only after consulting financial and religious experts would the council arrive at a formal opinion.
