Govt okays 40pc tax on banks’ windfall income

The caretaker government imposed a one-off 40 per cent tax on bank profits reaped from foreign exchange transactions in the past two years, a measure the previous coalition administration also considered but failed to implement. The federal cabinet’s approval of the windfall tax came after strong criticism of banks that they had earned a hefty Rs110 billion in profits in 2021 and 2022 from the speculative rupee-dollar trade. The decision was not in line with analysts’ expectations as most considered the tax imposition less likely. The cabinet’s meeting, chaired by Caretaker Prime Minister Anwaarul Haq Kakar, also approved amendments to the Haj Policy 2024, under which the unutilised quota of government and private sponsorship schemes would be returned to the Saudi government.