Council of Islamic ideology declares bank transaction tax Un-Islamic

ISLAMABAD: The Council of Islamic Ideology (CII) has declared that withholding tax on bank withdrawals and transfers is un-Islamic, describing it as an unfair burden. The council has urged the government to immediately review this policy in light of Islamic principles, the News reported.

The announcement came during a meeting chaired by Allama Dr. Raghib Naeemi. The council also discussed several other religious and legal issues, including human milk storage institutions, proposed amendments to the Diyat law, the protection of sacred texts, and ways to raise public awareness.

The CII said that lawmakers can set up milk banks through proper legislation, provided they follow specific conditions. It also stressed that the council should be part of any lawmaking on this subject.

On the Diyat law, the council strongly opposed the proposed changes. It insisted that the Shariah-prescribed quantities of gold, silver, and camels must remain part of the law. The council rejected the idea of removing silver or introducing non-Islamic measures for gold.

The CII further recommended that copies of the Holy Quran used in courts should be purified after use, and proper laws should be passed to ensure this. It also urged people to respect banners, flags, and symbols that carry sacred Islamic phrases, and suggested creating mobile ringtones to spread awareness.

The meeting ended with the council stressing that all measures must align with Islamic teachings and serve the welfare of society.

Separately, the Federal Board of Revenue (FBR) explained the importance of the Withholding Tax Certificate in Pakistan. This certificate shows that employers, banks, or service providers have deducted tax at the source—whether from salaries, contracts, or financial services.
It is essential for filing annual tax returns or claiming tax credits.

According to Section 164 of the Income Tax Ordinance, 2001, every withholding agent—such as banks, employers, or service providers—must issue this certificate to the taxpayer. The FBR clarified that taxpayers must attach the certificate with their income tax returns to confirm payment and avoid errors or penalties.

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