The federal government has implemented a 40 percent tax on windfall income earned by banks, based on the Federal Board of Revenue’s (FBR) recommendation. The decision was made during a cabinet meeting chaired by Caretaker Prime Minister Anwaar ul Haq Kakar. This new tax will apply to windfall income generated from speculative rupee-dollar exchange activities in the years 2021 and 2022.
JS Global’s analysis suggests that the imposition of this 40 percent tax on banks’ income from foreign exchange (FX) dealings will have significant consequences. The Finance Act of 2023 introduces a new section, 99D, allowing for the imposition of an additional tax on windfall income, profits, and gains of companies.
Furthermore, the cabinet gave approval for Bilateral Investment Treaties with Saudi Arabia and Qatar. Additionally, certain rules of the Public Procurement Regulatory Authority (PPRA) were exempted (Rule No 8, 13, 35, 38, and 40) to facilitate the procurement of 200,000 metric tons of urea from the international market.
In financial matters, the cabinet sanctioned a budget of 267.59 million rupees for the Jammu and Kashmir State property for the current fiscal year. Moreover, the cabinet directed the preparation of a draft insurance of accession to facilitate the ratification of the Hong Kong International Convention 2009. This initiative aims to ensure the safe and environmentally friendly recycling of ships.