UBL pays Rs11.59 billion against tax demand

UBL pays Rs11.59 billion against tax demand

KARACHI: United Bank Limited (UBL) has paid Rs11.59 billion against tax demand created by Federal Board of Revenue (FBR) for past multiple years.

According to financial statement submitted to Pakistan Stock Exchange (PSX) on Wednesday, the bank said that the income tax authorities had issued amended assessment orders for the tax years 2003 to 2018, and created additional tax demands (including disallowances of provisions made prior to Seventh Schedule) of Rs.11.591 billion (December 31 2018: Rs.13.119 billion), which had been fully paid as required under the law.

However, the bank has filed appeals before the various appellate forums against these amendments, the bank said, adding that where the appellate authorities have allowed relief on certain issues, the assessing authorities have filed appeals before higher appellate forums.

“Where the appellate authorities have not allowed relief the Bank has filed appeals before higher appellate forums. The management of the Bank is confident that the appeals will be decided in favor of the Bank.”

According to the financial statement, the bank said that the tax returns for Azad Kashmir (AK) and Gilgit Baltistan (GB) Branches have been filed up to the tax year 2018 (financial year 2017) under the provisions of section 120(1) read with section 114 of the Ordinance and in compliance with the terms of the agreement between banks and the Azad Kashmir Council in May 2005.

The returns filed are considered as deemed assessment orders under the law.

The bank further said that the tax authorities have also carried out monitoring for Federal Excise Duty, Sales tax and withholding taxes covering period from year ended 2007 to 2017.

Consequently various addbacks and demands were raised creating a total demand of Rs. 889 million (2018: Rs. 995 million).

The Bank has filed appeals against all such demands and is confident that these would be decided in the favor of the bank.

The tax returns for Yemen, Qatar and UAE branches have been filed upto the year ended December 31, 2018 under the provisions of the laws prevailing in the respective countries, and are deemed as assessed unless opened for reassessment.

The bank has received corrective tax assessment of QAR 1 M (Rs: 42.946 million) from the General tax Authority (GTA) in respect of tax year 2004 with no supporting calculations from GTA.

Management has requested details for 2004 assessment from GTA, however to date no response has been received. Management is confident that the matters will be decided in favour of the Bank and the possibility of any outcome against it is remote, the UBL said in its financial statement.