Karachi, March 9, 2026 – Bank Alfalah Limited has disclosed tax contingencies for the calendar year ended December 31, 2025, in its annual financial statements filed with the Pakistan Stock Exchange (PSX).
The bank’s income tax assessments have been finalized up to tax year 2025. However, for tax years 2008, 2014, 2017, 2019, and 2021 to 2025, the tax authorities have raised issues including default in WWF payments, allocation of expenses to dividends and capital gains, treatment of dividend income from mutual funds, and disallowance of leasehold improvements. These matters have resulted in a tax demand of Rs. 2,844.103 million, up from Rs. 1,217.274 million at the end of 2024, net of relief provided in appeals. The bank has filed appeals with the Commissioner Appeals and Tribunal and remains confident of a favorable outcome, so no provision has been made in the financial statements.
Additionally, Bank Alfalah received orders from a provincial tax authority for the periods July 2011 to December 2020, demanding sales tax on banking services and penalties of Rs. 763.312 million (excluding default surcharge). Appeals for July 2011 to June 2014 are pending before the Commissioner Appeals, while disputes from July 2014 to December 2020 have been filed with the Sindh High Court. These cases have been remanded to the adjudicating authority after year-end. The bank has not made any provisions for these matters, expecting a favorable resolution.
For accounting years 2016, 2017, and 2018, the bank received multiple tax orders demanding sales tax, further tax, and penalties totaling over Rs. 25 million, all pending before the Commissioner Appeals and Appellate Tribunal.
Other addbacks raised by tax authorities for various assessment years are under appeal with the Commissioner of Inland Revenue (Appeals), Appellate Tribunal Inland Revenue (ATIR), High Court of Sindh, and the Supreme Court of Pakistan. Management believes these issues will be settled in the bank’s favor and has not made provisions in this regard.
Bank Alfalah emphasizes that all tax disputes are actively under appeal, and the bank remains committed to resolving these matters through the legal process.