ISLAMABAD: Government is considering slapping windfall tax on profits of banking sector in range of 50 percent to 70 percent similar to one used in West, which imposed same tax on energy companies.

“Different proposals are under consideration for imposing Windfall Tax on profits earned by banking sector. A fixed tax rate from 50 percent to 70 percent is expected to be slapped for getting revenues out of lofty profits earned by banks,” officials, who spoke on condition of anonymity, it is reported.

However, sources in Federal Board of Revenue said that proposal is yet to be approved by government though Finance Minister Ishaq Dar had hinted in his press briefing that government would move ahead with Windfall Tax on banking sector.

Government is ascertaining exact levels of windfall profits extracted by banking sector through recent currency manipulation. Policymakers may slap tax at rate whereby there is no threat of choking banking sector. Tax officials who are working on this proposal studied Windfall Tax imposed by United Kingdom, Austria, Italy, Australia and other countries whereby energy companies had earned lofty profits in aftermath of Russia-Ukraine war, so respective governments had imposed Windfall Tax to generate revenue. Even Biden administration in USA had threatened to impose Windfall Tax.

Published in The Daily National Courier, January, 07 2023

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