On Wednesday, the Islamic Ideological Council (CII) ruled that it is not Islamic to impose withholding taxes on bank transfers or withdrawals.
According to the Council, there is no legitimate cause in Shariah to deduct taxes from one’s own funds.
We were asked to explain that it is not Islamic to pay withholding tax on your own funds in a bank while operating under the guidelines of the Quran and Sunnah. This isn’t justified in any way. This sum cannot be subtracted in any manner,” Dr. Naeemi clarified.
Given that withholding tax has been a contentious source of government funding in Pakistan, the decision may have significant effects on the country’s financial system.
