Islamabad: The President approved the Income Tax Amendment Ordinance 2024, after which the government increased the tax rate imposed on banks for the current financial year.
The federal government has increased the tax rate imposed on banks for the current financial year 2024-25, however, it has abolished the additional tax collected in case the targets set for lending to the private sector are not met.
The President of Pakistan has issued the Income Tax (Amendment) Ordinance 2024. Under the ordinance, the tax rate on banks has been increased from 39 percent to 44 percent for the financial year 2025. This rate will be 43 percent in the financial year 2026 and 42 percent from 2027.
The additional tax on the advance-to-deposit ratio was temporarily suspended for the fiscal year 2024 and was to be reimposed in 2025, however, the Islamabad High Court issued an interim order on various petitions, stopping the collection of this tax.
