Pakistan: “Windfall profits tax” on banks
Under new ordinance, banks are obligated to pay 40% additional tax on windfall income, profit, and gains
“Windfall profits tax” on banks
The Federal Board of Revenue on 21 November 2023 issued S.R.O. 1588 (l)/2023, specifying banking companies as the sector for purposes of Section 99D of the Income Tax Ordinance, 2001, which empowers the government to impose an additional tax on company operating in a specified sector or sectors, not exceeding 50% of “windfall” income, profit, or gains arising due to economic factors for any of the last three years preceding the tax year tax year 2023 and onwards.
Under the new ordinance, banks are obligated to pay 40% additional tax on windfall income, profit, and gains arising during calendar years 2021 and 2022 (tax years 2022 and 2023) by 30 November 2023. The deadline is extendable for up to 15 days upon application to the tax authority.
Read a November 2023 report [PDF 228 KB] prepared by the KPMG member firm in Pakistan
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