BeNewz
Related Articles
The Senate Standing Committee on Finance has approved the Income Tax Amendment Bill 2025. During the meeting, the committee was informed that the tax rate on banks’ profits has been increased from 39% to 42%, in addition to a super tax on banks’ income.
The session, chaired by Senator Saleem Mandviwalla, included a briefing on banks’ Advance-to-Deposit Ratio (ADR). Finance Minister Muhammad Aurangzeb stated that the new tax rate on banks’ profits has been set at 42%, while the Chairman of the Federal Board of Revenue (FBR) confirmed that the super tax on banks’ income would be imposed separately.
Chairman Mandviwalla raised concerns over the classification of the bill, noting that the legislation regarding filers and non-filers had been termed a money bill. He pointed out that the current law is also being categorized as a money bill, whereas it is, in fact, an amendment to existing legislation. He further stated that while the government claimed the Speaker of the National Assembly had declared it a money bill, his own conversation with the Speaker revealed otherwise.
Senator Shibli Faraz suggested seeking an opinion from the Ministry of Law on the matter, asserting that such a bill cannot be passed in the Senate. In response, Chairman Mandviwalla clarified that while the Senate has the authority to deliberate on a money bill, it does not possess the power to vote on it. However, Finance Minister Muhammad Aurangzeb maintained that the legislation falls under the category of a money bill. The committee chairman reiterated that the Speaker had denied classifying any bill as a money bill. In turn, the Finance Minister suggested that the Speaker’s stance be confirmed after reviewing the bill.
Providing further details, the FBR Chairman explained that the previous tax rate for banks was 39%, and an additional 70 billion rupees in tax revenue had been collected this year. He also noted that, as of December 31, additional tax had been levied on banks that failed to maintain the required Advance-to-Deposit Ratio.
During the discussion, Senator Shibli Faraz pointed out that in January of this year, 440 billion rupees had been returned to banks. Finance Minister Muhammad Aurangzeb emphasized that the government has sought to increase taxes on banks’ profits, highlighting that banks play a crucial role in assisting the government during financial crises.
The FBR Chairman further disclosed that banks have taken legal action against these taxes, arguing that their operations should not be subject to such taxation. Nevertheless, he reaffirmed that a super tax would also be imposed on banks’ profits.
Following these deliberations, the Senate Standing Committee on Finance approved the Income Tax Amendment Bill 2025.
