The abrupt application of a withholding tax on exchange businesses, which are receiving notices from the Federal Board of Revenue in the hundreds of millions of rupees, may cause the dollar price to cross Rs200 (FBR).
Representatives of the exchange companies said they have received notifications from the FBR for failing to pay the withholding tax that was withdrawn in 2016.
Tax notices have caused fear among exchange companies, despite their representatives’ assurances that the additional cost will be passed on to customers, potentially pushing the dollar rate above Rs200.
“The exchange companies are receiving notices to pay withholding tax of up to Rs1 billion.” It went into effect in 2014 and was repealed in 2016,” said Malik Bostan, chairman of the Exchange Companies Association of Pakistan.
