Press Release
Follow up to the Finance Bill:
Following the release of the Federal Budget 2022-2023, PBA has been actively lobbying against the issue of unfair taxation for the banking industry.
Several meetings have taken place to address the situation, including two meetings held with Dr. Miftah Ismail, the Federal Minister for Finance and Revenue, on June 20 in Karachi and June 24, 2022 in which Chairman PBA and his senior team also participated. Subsequent to the meetings, the CEO/SG PBA, has also formally written to the Federal Minister for Finance and Revenue, again pointing out the inequitable burden of taxation borne by the banking industry which includes the tax rate of 35% and the Super Tax of additional 4% retained in the draft 2022-2023 Finance Bill which was presented to the Parliament.
The retrospective tax applied for Poverty Alleviation and the revised tax applicable retrospectively to Income from Government Securities was also brought to the Finance Minister’s notice as being fundamentally unfair, particularly as banks have already closed their Tax Year 2022 (Accounting Year 2021).
Even with continuing requests, the final Federal Budget approved in the National Assembly on June 29, 2022, did not take into account the 4% Super Tax already being paid by banks. Hence, with the Super Tax of 10% imposed on certain industries including banks through the Finance Bill 2022-23, the all-in tax rate for banks has gone up to 49%.
The PBA office is in the process of writing to the Federal Minister for Finance and Revenue again, to consider the 4% already being paid by banks as Super Tax and instead of 10%, the increased Super Tax amount should be 6% for banks, bringing the all in tax rate for banks to 45% instead of 49%.
__________________________________ENDs____________________________