KARACHI – Pakistan’s apex tax collection authority has announced a new tax measure to garner 40 percent additional tax from the banking sector on their windfall income.
A notification shared by the Federal Board of Revenue (FBR) said the federal government has specified the banking sector for the purpose of section 99D of the Income Tax Ordinance.
Under the new policy, a new method has been determined by which windfall income, profits and gains are required to be computed, and the rate of tax for the purpose of the said section 99D is 40 percent.
It said FBR fixed November 30, 2023 as date to complete the payment of additional tax.
The notification said payment of the additional tax shall be made in the federal treasury through a prescribed challan or computerized payment receipt.
To clarify the new move, FBR cited example to show the application of the tax measure. The example is of banking firm that raked in Rs100 million from foreign exchange dealings in 2021, and its average income from such dealings for the past six years was Rs50 million.
In such case, its windfall income, profits and gains from foreign exchange dealings for 2021 is Rs50 million, and it needs to pay additional tax liability Rs20 million.
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