Govt likely to impose heavy taxes on banking sector in Budget FY24
Business
The head of research at JS Global says there is a likelihood of increase in super tax
KARACHI (Web Desk) - The coalition government is likely to impose heavy taxes on the country banking sector in the 2023-24 budget with an aim to tap easy money.
A representative of a leading brokerage firms says what he believes the 2023-24 budget will likely carry more negative earnings implications for banks.
Amreen Soorani, who is head of research at JS Global, says there is a likelihood of super tax increasing from the current level of four per cent for the banking sector to 10pc, which will lead to an earnings impact of 13pc for 2023.
In a research report released to clients, she says the banking sector already pays a higher corporate tax of 39pc versus the 29pc rate applicable to other corporate entities. The sector also pays a 39pc tax rate on other income sources like capital gains and withholding tax on dividends.
An increase in the super tax to 10pc this year will result in base earnings’ estimates to decline by 11pc on an annualised basis, Ms Soorani said, adding another likely tax measure in the upcoming budget is a flat tax on income generated from federal government securities (FGS).
