Karachi, March 6, 2025 – A group of banks in Pakistan is preparing to approach the Supreme Court to challenge the recent Sindh High Court decision regarding the windfall tax imposed on foreign exchange income. This move comes as banks seek legal recourse against what they deem an unfair tax burden. According to the annual report for 2024, Habib Bank Limited (HBL) revealed that in 2023, a windfall tax was levied on the foreign exchange earnings of banks for the years 2021 and 2022. For HBL alone, the calculated tax liability for these two years amounts to Rs 4,865 million, for which the tax department has already issued a recovery notice. In response, the bank had initially filed a Constitutional Petition in the Sindh High Court, contesting the legality of S.R.O 1588 (l)/2023, issued on November 21, 2023, which imposed the windfall tax. The court had temporarily suspended the operation of the S.R.O pending further hearings. Similar relief was granted to other banks by the High Courts of Lahore, Islamabad, and Peshawar. READ MORE: SHC Upholds Windfall Tax, Denies Suspension Request However, in a recent ruling, the Sindh High Court dismissed the banks’ petition, effectively upholding the tax imposition. In light of this, the banks now plan to escalate the matter to the Supreme Court, challenging the decision on constitutional, legal, and procedural grounds. Based on legal advice, the banks remain optimistic that their stance will ultimately prevail, and therefore, no provision for this tax liability has been made in their financial statements. As per the annual financial statement, the income tax returns of HBL have been duly…