President Zardari promulgates Income Tax (Amendment) Ordinance

ISLAMABAD: President Asif Ali Zardari has promulgated the Income Tax (Amendment) Ordinance, 2024, introducing significant changes to Pakistan’s tax structure.

The ordinance, which amends the Income Tax Ordinance, 2001, aims to increase revenue generation and promote transparency in the tax system.

The tax rate for banking companies has been increased to 44 per cent for the tax year 2025, which is expected to generate approximately Rs. 70 billion for the government by December 31, 2024.

The tax rate for banking companies will be reduced to 43 per cent in 2026 and 42 per cent in 2027 and subsequent years. The tax rate for small companies remains unchanged at 20 per cent, while the rate for all other companies is 29 per cent.

The ordinance explains the method for calculating the ratio of total advances to deposits for banks. The government has set the “Type of Company-Rate of Tax” for banks in the ordinance.

The tax rate for a banking corporation would be 44per cent for the 2025 tax year, 43per cent for the 2026 tax year, 42per cent for the 2027 tax year and beyond, 20per cent for small businesses, and 29per cent for all other businesses.

The amount of “gross advances and deposit” at the conclusion of the accounting period and as reported in the yearly audited accounts is what the Ordinance defines as “gross advances and deposit” for the purposes of calculating the gross advances to deposit ratio.

Earlier on Sunday, President Asif Ali Zardari Sunday signed the Seminary Registration Act into law.

According to a National Assembly spokesperson, the Societies Registration Act 2024, makes it a law. The step comes as part of the government’s ongoing efforts to regulate and formalize the registration of various entities, including seminaries (Madrasahs).

According to a National Assembly spokesperson, with President Zardari’s signature, the bill has been successfully converted into law. The National Assembly is expected to issue the gazette notification soon.

Under the new law, religious seminaries (Madrasahs) will now be required to register under the Societies Registration Act, streamlining the regulatory framework for such institutions.