40% tax on banks’ windfall profits

ISLAMABAD:

The federal cabinet on Wednesday took major decisions, including approving amendments to Hajj Policy 2024 and imposing 40 per cent tax on windfall profit earned by banks on foreign exchange transactions during the years 2021 and 2022.

It also sanctioned holding negotiations on Bilateral Investment Treaties with Saudi Arabia and Qatar on the suggestion of the Investment Board.

The cabinet session was presided over by Caretaker Prime Minister Anwaarul Haq Kakar in the federal capital.

It approved amendments to Hajj Policy 2024 under which the government and private unutilized sponsorship schemes quota would be returned to the Saudi government. Further, in accordance with the Saudi government’s law, a foolproof monitoring system will be implemented for the financial arrangements of Hajj group organizers.

Besides, children under 10 years of age will also be able to perform the religious obligation. Under the private Hajj schemes, the condition of keeping an assistant/helper will be relaxed for people over 80 years of age.

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However, Hajj group organizers will enter into an agreement with the pilgrims in this regard, enabling them to enlist services of local supporters during their stay in Saudi Arabia.

This condition will be inserted in the agreement for provision of services and its violation would lead to imposition of fine and blacklisting of relevant Hajj group organizer.

The meeting also sanctioned reduction in the hardship Hajj quota.

A total of 50 per cent quota of local supporters will be allocated for those Pakistani students who are studying in different universities of Saudi Arabia and their deployment would be made as welfare staff.

The cabinet in its previous meeting had constituted a committee to bring improvement in Hajj policy 2024. The amendments were made to the policy in light of these proposals.

On the recommendation of Federal Board of Revenue, the cabinet also approved imposition of 40 per cent tax on windfall profit earned by banks on the foreign exchange transactions during the years 2021 and 2022.

The Finance Act, 2023 introduced a new section 99D in the Income Tax Ordinance 20121 which would enforce the imposition of tax on windfall income profits and gains of the banks.

The meeting also approved holding of negotiations on Bilateral Investment Treaties with Saudi Arabia and Qatar on the recommendation of the Investment Board.

On the advice of the Ministry of Trade, the cabinet sanctioned constitution of a committee with regard to hearing of appeals against orders of Trade Organizations Regulators, exemption and flexibility in the provisions of Import Policy Order 2022 and Export Policy Order 2022.

The minister for trade will act as convener of the committee whereas ministers for law and planning would be the other members.

The cabinet, on the advice of the interior ministry, also approved inclusion of Democratic Republic of Congo, Malawi, Zambia, Zimbabwe and Kyrgyz Democrat in the business visa list. It allowed removal of the names of 18 persons from the Exit Control List and placing of nine other names in it.

While on the recommendation of the Ministry of Kashmir Affairs and Gilgit-Baltistan, the cabinet approved Jammu and Kashmir State Property Budget for the fiscal year 2023-24. For the current year, its budget is earmarked at Rs267.590 million.

The meeting, on the recommendation of the Ministry of Maritime Affairs, approved signing of Hong Kong International Convention 2009 for the safe and environment sound recycling of ships and preparation of draft Instrument of Accession.

Under the convention, Pakistan will legislate over recycling of ships and the training would be imparted to the relevant staff, besides enhancing their capacity.

Moreover, availability of relevant technological instruments will be ensured for the disposal of any hazardous wastes during the recycling process.

The safety of labourers linked with the recycling industry will be ensured which would significantly benefit ship reprocessing units in Pakistan.

On the recommendation of Cabinet Secretariat, the cabinet also granted exemption to Trading Corporation of Pakistan from Rules 8, 13, 35, 38 and 40 of the Public Regulatory Authority Rules 2004, for the procurement of 200,000 metric ton urea from the international market.