President of Pakistan Approves Higher Bank Tax to Help FBR Collect Rs. 70 Billion

The President of Pakistan promulgated the Income Tax (Amendment) Ordinance 2024 to revise the tax rate structure for banks under the advances-to-deposit ratios. The FBR will generate an additional amount of around Rs. 70 billion from banks after the promulgation of the Income Tax (Amendment) Ordinance 2024. Sources told ProPakistani that the government has increased the tax rates on banks from the tax year 2025 while at the same time removing the additional tax due that was imposed where advances-to-deposit ratios failed to meet private sector lending targets. The President of Pakistan promulgated the Income Tax (Amendment) Ordinance 2024 that increases the tax rate from 39 percent to 44 percent for the tax year 2025, 43 percent in 2026 and 42 percent from the tax year 2027 onwards. The additional tax based on advances-to-deposit ratios had been temporarily suspended for the tax year 2024 and was intended to resume in the tax year 2025, but the Islamabad High Court had issued an interim order to stay the collection of the tax following the filing of a number of writ petitions against the tax.