As the financial year draws to a close, the budget for the next looms ahead, and with a large number of budget proposals. One such proposal is an increase in the rate of withholding tax on cash withdrawals from banks from the present 0.3 percent to 0.35 percent, or to even 0.5 percent. This proposed raise is actually a bad idea, and is against all ideas of modern taxation. Apart from this, there is also the question of how the tax has operated so far. It has failed to bring into the tax net in any significant numbers those who are out of it, but should be in it, even though this was given as the reason for this extension of the withholding tax in the first place. This tax has worked against a dearly held aim of the government, increased documentation of the economy through increased issuing of checks. The government, in thinking of this proposal, has also ignored the fact that the cash withdrawal limit, which was meant to spare the small depositor and petty cash transactions, has not been raised, meaning that the very transactions which the government wanted to avoid are the ones being hit. The amount so levied was not negligible, but it was payable. Now, the tax is going beyond that threshold. It is one more imposition on the average consumer, who has already to bear the burden of not just taxation, but also of inflation. Increases in taxation are inflationary, and particularly painful in Pakistan, where the government does not provide the services the taxation should provide, while its members merely consider government money a source of supporting their luxurious lifestyles. If the budget needs balancing, it should be from considerations of the national interest, not because the IMF is applying pressure. The government must drop the idea of increasing the withholding tax. It should be remembered that the tax administration is so ramshackle that the government never returns extra amounts extracted.