Islamabad: The Federal Revenue Council (FBR) of 23 billion rupees from 16 major banks in one day on February 21, 2025, following a ruling on the Supreme Court of Sind (SHC), which supported the surprise tax under Article 99 d of income tax decree, 2001.
The decision represents a major step in the government’s strategy to ensure tax compliance with the corporate sector.
According to the sources mentioned by the news, this recovery was the result of coordinated efforts led by Prime Minister Sherfins Sharif, with active involvement from the governor of Pakistan Governmental Bank (SBP), Pakistan Public Prosecutor, Chairman of the Board of FBR, and a legal team. The ruling, which was issued by the SHC constitutional seat, rejected the financial sector petitions in challenging the surprise tax, which allowed the government to secure revenues quickly.
The surprise tax, which was presented through the Finance Law 2023, enables the government to impose taxes on up to 50 % of the unexpected excessive profits resulting from economic fluctuations. Between 2021 and 2023, banks made great gains by taking advantage of the low value of the currency, as the Pakistani rupee decreased from 168 rupees per US dollar in 2020 to 286 rupees in 2023, which expands the gap between bank exchange rates and open market prices.
In response, the government imposed a 40 % tax on foreign currency income through SRO 1588 (I)/2023 in November 2023.
Sudden taxes have been implemented in various countries, including the United States, the United Kingdom, Italy, Romania, Greece, Spain and Poland. In the aftermath of the enforcement of this successful tax, the government has now turned focus to recover suspended revenues from other taxes that focus on the elite, including the high tax (section 4B and 4C), a tax on unspecified reserves, capital value tax (CVT) on foreign assets The tax tax is considered unused real estate, and taxes on profits between companies.
Legal reforms under the twenty -sixth constitutional amendment, which led to the establishment of constitutional seats in the Supreme Court and Supreme Courts, has recorded tax -related cases, which prevents long legal challenges. The government is also allocating additional legal resources to enhance its position in the court’s battles against tax evasion.
With the recovery of 23 billion rupees within 24 hours of SHC rule, FBR looks at this as a major shift in the framework of taxes in Pakistan, with the aim of ensuring that taxes are imposed on companies fairly while preventing tax burdens from improving inappropriately on the lower and medium layers.
