ISLAMABAD: The Federal Board of Revenue (FBR) on Wednesday imposed a 40 percent additional tax on windfall profits of banks arising from foreign currency deals during 2021 and 2022.
The FBR issued a statutory regulatory order (SRO), singling out banking companies as the focal sector for the purpose of section 99D of the Income Tax Ordinance.
According to the notification, the FBR has provided a detailed methodology for the calculation of windfall income, profits, and gains, ensuring strict adherence to specified provisions.
Furthermore, a fixed tax rate of 40 percent has been established for the purposes outlined in section 99D, offering clarity on the financial obligations that banks are required to fulfill.
FBR Allows Extended Deadline
Acknowledging the dynamic nature of financial operations, the FBR has allowed the possibility of an extended deadline, not exceeding fifteen days beyond November 30, 2023. However, this extension is subject to approval by the Commissioner, contingent upon a written application by the taxpayer, accompanied by justifiable reasons for the need for an extension.
The FBR has explicitly stated that the additional tax payment must be made through the federal treasury using a prescribed challan or computerized payment receipt. This meticulous requirement aims to ensure a transparent and traceable process in accordance with regulatory standards.
In an effort to maintain consistency and fairness, the FBR has outlined a formulaic approach for the computation of windfall income, profits, and gains. This method, as prescribed by the tax authorities, aims to establish a standardized framework for evaluating financial windfalls in the banking sector.
2023112216111349932S.R.O.1588
