Karachi, September 6, 2023 – The National Bank of Pakistan (NBP) has disclosed that its total tax contingencies have risen to Rs 29.26 billion, according to official documents released recently.
In its statement, the NBP revealed that the cumulative effect of contingencies as of June 30, 2023, which includes an amount of Rs 1,912 million (compared to Rs 1,912 million as of December 31, 2022) related to indirect tax issues, now stands at Rs 29.26 billion, compared to Rs 27,159 million at the end of December 2022.
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Notably, no provisions have been made against these contingencies, as the bank’s tax consultant is optimistic about favorable outcomes pending appeals, as detailed in the bank’s half-year report.
The bank also pointed out that the Taxation Officer, in accordance with instructions/directions from the learned Commissioner Inland Revenue (Appeals), has issued appeal effect orders for tax years 2019 and 2020. For these years, the tax liability or refund has been assessed at Rs. 1,852 million and Rs. 1,997 million, respectively.
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Additionally, assessment proceedings for tax year 2022 were initiated under section 122(5A) of the Income Tax Ordinance, 2001. Initially, this reduced the tax refund to Rs. 3,853 million. However, it was subsequently increased to Rs. 7,159 million through a rectified order dated June 08, 2023. The bank has filed an appeal before the Commissioner Inland Revenue (Appeals) and expresses confidence in a favorable outcome.
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In a related development, the Appellate Tribunal Inland Revenue (ATIR) has issued appellate orders for tax years 2006, 2007, and 2016, overturning monitoring orders and remanding the issues back to the assessing officer for re-verification, following the ATIR’s instructions.
The NBP’s disclosure highlights the ongoing challenges and complexities in the realm of tax contingencies, with the bank remaining hopeful of resolving these matters in its favor through legal channels and appeals. These developments will be closely monitored by stakeholders and the financial community as they unfold.
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For further information and updates, interested parties are encouraged to refer to the National Bank of Pakistan’s official reports and communications.
