Islamic Council Takes U-Turn on Declaring Withholding Tax Un-Islamic. The Council of Islamic Ideology (CII) has issued a formal clarification regarding the status of withholding tax on money withdrawals and transfers, confirming that no final decision has been made.
The statement comes after widespread media reports and public discussions suggesting that the Council had declared the tax un-Islamic.
No Consensus on Withholding Tax
According to an official statement from the Chairman’s Desk, some members of the Council shared their personal views on withholding tax during the 243rd meeting held on September 24, 2025, but the Council did not reach a consensus or issue a formal ruling.
“The matter remains under discussion and will be revisited in the next meeting,” the statement read.
The Council clarified that further expert opinions and additional information will be sought before any decision is taken.
Background of the Controversy
Earlier reports claimed that the CII had declared the withholding tax on money withdrawals or transfers unjust and un-Islamic, urging legislative action to protect citizens from what was seen as an undue financial burden.
The speculation sparked public debate, with many questioning the religious and legal legitimacy of the tax.
FBR Seeks Legal Clarification
In response to these reports, the Federal Board of Revenue (FBR) decided to challenge the alleged ruling in the Supreme Court of Pakistan.
The FBR emphasized that withholding tax is an essential part of Pakistan’s revenue system, ensuring proper documentation and government funding. The authority is seeking clarity on the constitutional and legal status of any opinion issued by the Council.
CII Will Revisit the Issue
With the CII now clarifying that no final decision has been made, the debate over the religious and legal status of withholding tax remains unresolved.
The Council confirmed that the topic will be discussed again in the next meeting, after consulting experts and gathering more information to ensure a balanced and informed decision.
Key Points to Note
- The Council of Islamic Ideology (CII) has not officially declared withholding tax un-Islamic.
- Some members expressed personal opinions, but there is no formal ruling yet.
- The Federal Board of Revenue (FBR) is prepared to seek legal clarity through the Supreme Court.
- The CII will revisit the issue in its next meeting after expert consultations.
FAQs
Q1: Has the CII officially declared withholding tax un-Islamic?
No. The Council clarified that no final decision has been made.
Q2: Why did the FBR react to this issue?
The FBR wants to protect the government’s revenue system and ensure legal clarity regarding withholding tax.
Q3: When will the CII make a final decision?
The Council plans to review the issue in its next meeting after seeking further expert opinions.
Q4: What is withholding tax?
Withholding tax is a tax deducted from money withdrawals or transfers, forming part of Pakistan’s revenue framework.
Conclusion
The Council of Islamic Ideology (CII) has clarified that no final decision has been made on the withholding tax. The matter remains under discussion, and further expert consultations will guide a balanced ruling in upcoming meetings.
