Cabinet slaps 40pc windfall tax on forex profits by banks in CY21, 22

ISLAMABAD: Upon the recommendation of Federal Board of Revenue (FBR), the federal cabinet on Wednesday accorded approval to 40 percent tax on windfall profit earned by banks on the foreign exchange transactions during the years 2021 and 2022.

The Finance Act 2023 introduced a new section 99D in the Income Tax Ordinance 20121, which would enforce tax on windfall income profits and gains of banks.

The cabinet, in its meeting chaired by Caretaker Prime Minister Anwaar-ul-Haq Kakar, also approved amendments to the Haj Policy 2024 under which the government and private un-utilised sponsorship schemes quota would be returned to the Saudi government.

Besides, in accordance with the Saudi government’s laws, a foolproof monitoring system of the financial arrangements of Haj group organisers would be enforced whereas under the new Haj policy, children below the age of 10 years would be able to perform the religious obligation. For pilgrims above the age of 80 years, conditions for keeping an assistant/ helper would be relaxed, however, the Haj group organisers would enter into agreements with the Hujjaj (pilgrims) in that regard, enabling them to enlist the services of local supporters during their stay in Saudi Arabia.

The condition would be inserted into the agreement for services and its violation would lead to fine and blacklisting of relevant Haj group organiser, it was added. It also allowed the removal of names of 18 persons from the Exit Control List (ECL) and placing nine other names in the list on the advice of Interior Ministry.