President Zardari enacts tax reforms with new Income Tax Ordinance, 2024

President Asif Ali Zardari has enacted the Income Tax (Amendment) Ordinance, 2024, introducing major reforms to Pakistan’s tax structure.

According to a report by ARY News on Tuesday, the ordinance amends the Income Tax Ordinance, 2001, aiming to boost revenue and enhance transparency in the tax system.

For the tax year 2025, the tax rate for banking companies has been raised to 44%, projected to generate around Rs. 70 billion by December 31, 2024. The rate will decrease to 43% in 2026 and 42% from 2027 onward. Small companies will continue to pay 20%, while the rate for other companies remains at 29%.

The ordinance specifies how banks must calculate their gross advances-to-deposit ratio, based on figures reported in annual audited accounts. It also sets the tax rate structure for banks at 44% in 2025, 43% in 2026, and 42% from 2027 onward.

Separately, President Zardari has signed the Seminary Registration Act, 2024, into law. The legislation, part of broader government efforts to regulate various entities, mandates that religious seminaries (Madrasahs) register under the Societies Registration Act, 2024.

According to a National Assembly spokesperson, the bill’s signing formalizes the law, with a gazette notification expected soon. The new law aims to streamline the regulatory framework for religious institutions.