A.   Background

This refers to the related Important TLQCs in trail, blue, italic and double line (a) 2989 of 31.12.24 about IT (Amendment) Ordinance 2024 – KPMG Brief (b) 2988 of 31.12.24 about IT (Amendment) Ordinance 2024.

B.   Updated Commentary

We would inform you that the Income Tax Amendment Bill 2025 passed by the National Assembly (Attachment 3132.1) consists of 2 pages. This has been found from reliable resources and till a few hours before release of this TLQC was not on FBR, National Assembly and Senate. We trust that it specifies the Bill and it is yet to be signed by the President.

2.   Formerly Ordinance on 30.12.24 /  31.12.24 similar to above had been promulgated by the President and which came into effect immediately, resulting in substantial change of tax rate for the banking sector for the Tax Year 2025 and onwards.

3.   The (and earlier Ordinance) and this Bill have been brought in with a single point agenda, that is to reduce the revenue shortfall of circa Rs. 1 trillion of FBR by increasing the tax rate for banks from 39% to 44% for Tax Year 2025. The new tax rate will impact the applicable tax on the banks for TY 2025 also resulting in additional advance tax payments by 31 December 2024 and onwards.

4.   It will effectively reduce Profit to Bank Account holders as well.

Should you require any clarification or explanations in respect of the above or otherwise, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com.