Finance Act 2022 would introduce a new concept of tax i.e. “Windfall Levy “in the Income Tax Ordinance 2001 for special taxation of the potential sectors not paying the due amount of taxes.
Top government officials informed that this is for the first time that such kind of “Windfall Levy” would be introduced in Pakistan. A new section would be added in the Income Tax Ordinance to specify details of the “Windfall Levy “ in the country.
UK government had imposed a 25 percent windfall tax on the profits of oil and gas firms. The levy would be placed on energy companies that were making “extraordinary profits” in the UK.
The rate of the “Windfall Levy “in Pakistan would not be as high as 25 percent, but it could range between 1 percent to 4 percent because it would be charged on an annual basis. The rate has not been finalized yet.
The “Windfall Levy” would be collected at the time of payment of tax by big sectors on the filing of income tax returns.
The government may collect the “Windfall Levy” from sectors earning extraordinary profits during the last few years, officials added.