National Bank reports increase in tax contingencies to over Rs.
29 billion
Karachi, September 6, 2023 - The National Bank of Pakistan (NBP)
has reported an increase in its total tax contingencies to Rs 29.26 billion,
according to official documents released recently.
In a statement, the NBP disclosed 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.
It's worth noting that no provisions have been made against
these contingencies, as the bank's tax consultant remains optimistic about
favorable outcomes pending appeals, as detailed in the bank's half-year report.
The bank also highlighted that the Taxation Officer, following
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.
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.
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 underscores 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. Interested parties are encouraged to refer to the
National Bank of Pakistan's official reports and communications for further
information and updates.
Source: Pkrevenue.com