Foreign exchange transactions: Cabinet approves levy of 40pc tax on banks’ windfall profits

ISLAMABAD: The caretaker federal cabinet, on the recommendation of the Federal Board of Revenue (FBR), approved imposing a 40 percent tax on windfall profits of banks, which they earned from foreign exchange transactions in 2021 and 2022.

Under the Finance Act 2023, Section 99D has been introduced in the Income Tax Ordinance 2001, under which, windfall tax will be applicable on windfall profits.

The caretaker federal cabinet has approved the negotiation of bilateral investment treaties with Saudi Arabia and Qatar on the recommendation of the Board of Investment (BoI) as well as amendments in Hajj Policy, 2024.

Forex deals: Tax on windfall profits of banks likely

The meeting of the federal cabinet presided over by caretaker Prime Minister Anwaarul Haq has approved exemption from Rule No 8, 13, 35, 38, and 40 of the Public Procurement Regulatory Authority Rules, 2004 to the Trading Corporation of Pakistan for the purchase of 200,000 metric tons of urea from the international market.

The meeting also approved amendments to the Hajj Policy, 2024, under which, the unused sponsorship quota of public and private schemes will be returned to the Saudi Arabian government.

Additionally, a foolproof monitoring system will be implemented regarding the financial arrangements of Hajj group organisers according to the Saudi government laws.

Apart from this, according to the new Hajj policy, children under 10 years of age will also be able to perform Hajj. In private Hajj schemes, the attendant requirement will be relaxed for people over 80 years of age, but the Hajj group organisers will enter into an agreement with the pilgrims to hire local helpers during their stay in Saudi Arabia.

This clause shall be included in the service provision agreement and violation of this clause may result in fine and blacklisting of the Hajj group organizer.

Additionally, the federal cabinet approved the reduction in hardship Hajj quota.

50 percent of the quota of local assistants will be allocated for Pakistani students studying in local universities in Saudi Arabia. These students will be posted as welfare staff.

The meeting of the caretaker federal cabinet in its previous meeting had constituted a committee to further improve the Hajj Policy, 2024, on the recommendations of which the aforementioned amendments have been made in the Hajj Policy, 2024.

On the recommendation of the Ministry of Commerce, the caretaker federal cabinet has approved a committee to hear the appeals against the orders of the regulators of trade organisations, on exemptions and relaxations in the terms of Import Policy Order (IPO) 2022 and Export Policy Order (EPO) 2022.

The caretaker federal minister of commerce will be the convener of this committee while the other members will include the Federal Minister for Law and the Federal Minister for Planning.

The caretaker federal cabinet also approved the inclusion of the Democratic Republic of Congo, Malawi, Zambia, Zimbabwe, and the Kyrgyz Republic in the business visa list on the recommendation of the Federal Ministry of Interior and on the recommendation of the Federal Ministry of Interior.

The Federal Cabinet approved removing the names of 18 persons from the ECL and adding the names of nine persons to the ECL.

The meeting approved the Jammu and Kashmir State Property Budget for the financial year 2023-24 on the recommendation of the Federal Ministry of Kashmir Affairs and Gilgit and Baltistan. The budget for the current year is Rs267.590 million.

On the recommendation of the Federal Ministry of Maritime Affairs, the Federal Cabinet approved the signing of the Hong Kong International Convention for the safe and environmentally friendly recycling of ships 2009 and the drafting of the instrument of accession in this regard.

Under this convention, Pakistan will legislate for recycling of ships and relevant personnel will be trained and capacity building in this regard. Additionally, the Convention will ensure the availability of relevant technological equipment for the disposal of any hazardous materials during the recycling of ships.

Apart from this, the protection of the workers associated with the ship recycling industry will also be ensured. This will greatly benefit Pakistan’s ship recycling industry.

Copyright Business Recorder, 2023