ISLAMABAD: Ashfaq Tola, Special Assistant to prime minister Shehbaz Sharif and his colleagues called tax on windfall profits of the banks announced by the caretaker government a non-starter.
During the economic review of the caretaker government with the IMF, it was asked decided that FBR should collect 40 percent tax on windfall profits of the commercial banks. FBR directed commercial banks to deposit 40 percent of their windfall profits to the national exchequer by November 30, 2023. Ashfaq Tola, who is also the head of the Chartered Accountants Association, while explaining his statement said that under Section 99D of the Income Tax Ordinance, 2001 (ITO), the FBR can impose additional tax on special income/profits and gains. This additional tax has been imposed on companies in the Finance Act 2023. A company which has gained huge ‘profit’ is termed windfall income. Windfall profit in the case of commercial banks, the income received by the banks due to a sudden decrease or sudden increase in the value of the Pakistani rupee against the dollar is being termed windfall. However, it has to be taken into account that the income of the tax year 2023 has increased in what proportion compared to the income of the last three years.
