Karachi, March 3, 2025 – Allied Bank Limited (ABL) has provided detailed disclosures regarding its tax contingencies for the calendar year 2024 through the transmission of its annual financial statement on Monday.
According to Allied Bank, income tax assessments for the bank have been finalized up to and including tax year 2024 for operations in Pakistan, Azad Kashmir, and Gilgit Baltistan. During this process, the tax authorities made certain add-backs with a total tax impact of Rs. 38,524 million (2023: Rs. 34,841 million).
As a result of appeals filed by Allied Bank before various appellate authorities, most of these add-backs have been reversed in favor of the bank. However, some disputes remain unresolved, and Allied Bank and the Tax Department are currently engaged in appeals and references before higher forums. Pending the finalization of these proceedings, no provision has been recorded against the aggregate sum of Rs. 38,524 million (2023: Rs. 34,841 million). The management of Allied Bank remains confident that the outcome of these appeals will be in the bank’s favor.
Furthermore, tax authorities have conducted withholding tax audits under Section 161/205 of the Income Tax Ordinance, 2001, covering tax years 2003 to 2006, 2008 to 2019, and 2022, resulting in an arbitrary demand of Rs. 2,029 million (2023: Rs. 2,029 million). The bank’s appeals before the Commissioner Inland Revenue (Appeals) [CIR(A)] and the Appellate Tribunal Inland Revenue (ATIR) remain pending. However, the management of Allied Bank is confident that these appeals will be resolved in favor of the bank, and as a result, no provision has been made against the Rs. 2,029 million demand.
Additionally, tax authorities have issued orders under the Federal Excise Act, 2005, Sales Tax Act, and Sindh Sales Tax on Services Act, 2011, for the years 2008 to 2017, creating an arbitrary aggregate demand of Rs. 1,144 million (2023: Rs. 1,144 million). Allied Bank’s appeals before CIR(A) and ATIR are still pending. However, the management remains confident that these demands will be dismissed, and therefore, no provision has been recorded against the Rs. 1,144 million.
Despite these ongoing tax matters, Allied Bank remains committed to legal compliance and expects a favorable resolution in all pending cases.