ISLAMABAD: The government is considering imposing a Windfall Tax on the profits of the banking sector in the range of 50% to 70% similar to the one used in the West, which imposed the same tax on energy companies.
“Different proposals are under consideration for imposing the Windfall Tax on profits earned by the banking sector. A fixed tax rate from 50% to 70% is expected to be slapped for getting revenues out of the lofty profits earned by the banks,” The News reported citing finance ministry sources.
Although Finance Minister Ishaq Dar intimated in his news conference on Wednesday that the government will proceed with the Windfall Tax on the banking industry, sources in the Federal Board of Revenue (FBR) claimed that the idea has not yet been approved by the government.
The government is figuring out exactly how much money the banking industry has made extra because to recent currency manipulation. The tax may be imposed by the policymakers at a level that poses no risk of suffocating the banking industry.
The government expects that in case of imposition of 50% to 70% fixed tax rate on lofty bank profits, the government can fetch Rs25 to Rs35 billion revenue generation. On the proposed Flood Levy, the government might grant an exemption on import of basic food items and raw materials of essential or life-saving drugs.
On the other hand, the FBR seeks to meet the annual tax collection target of Rs7,470 billion for the current fiscal year and has so far collected Rs3,428 billion in the first six months (July-Dec) period.
