Govt imposes 40% windfall tax on banks for IMF's installment

November 23, 2023 (MLN): In order to qualify for to qualify for the International Monetary Fund (IMF)’s impending installment, the care taker federal government has imposed a significant 40% windfall tax on banks, targeting their earnings generated from foreign exchange transactions.  

Accordingly, the Federal Board of Revenue (FBR) on Wednesday notified the said tax on windfall income of banks earned by banks from foreign exchange transactions over the past two years i.e., 2021 and 2022, totaling a substantial Rs 87.948 billion.

With the newly implemented tax, the government expects garnering approximately Rs 35.18bn from the banks' foreign exchange gains over these two fiscal years.

As per the reports, banks must remit the tax sum to the FBR by November 30, 2023. However, an extension until December 15 could be granted, subject to providing a valid reason to the Commissioner of Income Tax.

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