Karachi, August 7, 2025 – Bank Alfalah Limited has revealed that it is currently involved in several disputes with both federal and provincial tax authorities.
These issues were shared in the bank’s financial report for the first half of 2025, covering the period from January to June.
According to Bank Alfalah, its income tax matters have been finalized up to the tax year 2024. However, for certain years — including 2008, 2014, 2017, 2019, and 2021 to 2024 — the tax authorities have raised various concerns. These include unpaid amounts related to the Workers Welfare Fund (WWF), incorrect allocation of expenses, and disagreements over how dividend income from mutual funds should be treated. There were also disputes over the rejection of leasehold improvement expenses. Due to these matters, the tax department has made a total demand of Rs1,217.274 million. This amount remains the same as it was on December 31, 2024.
Bank Alfalah has challenged these demands and filed appeals which are currently waiting to be heard by the relevant tax tribunal. The bank’s management believes that the final decision will be in its favor, so it has not set aside any money to cover these amounts.
Additionally, Bank Alfalah received orders from a provincial tax department related to the period from July 2011 to December 2020. In these orders, the tax department demanded Rs763.312 million in sales tax and penalties. The authorities argued that the bank wrongly claimed some exemptions and failed to pay the full sales tax on certain services. For the years 2011 to 2014, the bank’s appeals are still pending before the Commissioner Appeals. For later years (2014 to 2020), the Appellate Tribunal ruled against the bank, but Bank Alfalah has now taken the matter to the Sindh High Court.
There are also other smaller disputes. For example, in the tax year 2016, Bank Alfalah received two separate orders demanding Rs5.191 million and Rs8.601 million for alleged non-payment of sales tax. Similar issues were raised for the years 2017 and 2018, with a demand of Rs11.536 million. Appeals for all these cases are currently in process.
In summary, while Bank Alfalah faces various tax-related disputes, the bank remains confident that these issues will be resolved in its favor through the legal and appeals process.