Cabinet approves levy of 40% tax on banks’ windfall profit earned during 2021-22

The federal cabinet on Wednesday accorded approval to impose 40% tax on windfall profit earned by banks on the foreign exchange transactions during the years 2021 and 2022, state-run wire service APP reported.

The cabinet meeting was chaired by Caretaker Prime Minister Anwaar-ul-Haq, which took the decision upon the recommendation of Federal Board of Revenue (FBR).

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

Meanwhile, the cabinet also approved amendments in the Hajj Policy 2024 under which the government and private unutilised sponsorship schemes quota would be returned to the Saudi Government, the PM Office Media Wing said in a press release.

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Besides, in accordance with the Saudi government’s laws, a fool-proof monitoring system over the financial arrangements of Hajj group organisers would be enforced whereas under the new Hajj policy, children below the age of 10 years would be able to perform the religious obligation.

For the pilgrims above the age of 80 years, conditions for keeping an assistant/helper would be relaxed, however, the Hajj 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 in the agreement for the provision of services and its violation would lead to imposition of fine and black listing of the relevant Hajj group organizer, it was added.

The meeting also sanctioned a reduction in the hardship Hajj quota. A total of 50 percent quota of hiring local supporters would be dedicated to those Pakistani students who are studying in different universities of the Kingdom of Saudi Arabia and their deployment would be made as welfare staff.

The cabinet in its previous meeting had constituted a committee to bring improvement in the Hajj Policy 2024 and under its recommendations the above-mentioned amendments were made.

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The meeting also approved the holding of negotiations on Bilateral Investment Treaties with Saudi Arabia and Qatar on the recommendation of the Investment Board.

Upon the proposal of Ministry of Trade, the cabinet sanctioned the constitution of a committee with regard to hearing of appeals against orders of Trade Organizations Regulators, exemption and flexibility in the provisions of Import Policy Order 2022 and Export Policy Order 2022.

The minister for trade would act as convener of the committee whereas ministers for law and planning would be the other members. The cabinet, upon the recommendation of the Interior Ministry, also approved the inclusion of Democratic Republic of Congo, Malawi, Zambia, Zimbabwe and Kyrgyz Democrat in the business visa list.

It also allowed the removal of the names of 18 persons from the Exit Control List (ECL), and placing nine other names in the list on the advice of the interior ministry.

On the recommendation of the Ministry of Kashmir Affairs and Gilgit Baltistan, it approved the Jammu and Kashmir State Property Budget for the fiscal year 2023-24. For the current year, its budget is earmarked at Rs267.590 million.

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The meeting approved the signing of Hong Kong International Convention 2009 for the safe and environment sound recycling of ships and preparation of draft Instrument of Accession in that regard on the suggestion of Ministry of Maritime Affairs. Under the convention, Pakistan would legislate over recycling of ships and training would be imparted to the relevant staff, besides enhancing their capacity.

Moreover, for the disposal of any hazardous wastes/materials in the recycling process, availability of the relevant technological instruments would be ensured. The safety of labourers linked with the recycling industry would be ensured. It would hugely benefit ship recycling industry in Pakistan.

Upon the advice of Cabinet Secretariat, the cabinet also granted exemption to the Trading Corporation of Pakistan from the Rules 8,13,35,38 and 40 of the Public Regulatory Authority Rules 2004, for the procurement of 200,000 metric ton urea from the international market