Karachi, March 3, 2025 – Allied Bank Limited (ABL) has disclosed its tax contingencies for the calendar year 2024 in its annual financial statement released on Monday. The disclosure provides a comprehensive update on ongoing tax assessments, appeals, and disputes involving the bank’s operations in Pakistan, Azad Kashmir, and Gilgit Baltistan.
According to the statement, Allied Bank’s income tax assessments have been finalized for all tax years up to and including 2024. During this process, tax authorities identified certain add-backs, leading to a total tax impact of Rs. 38,524 million for the year, up from Rs. 34,841 million in 2023. However, most of these add-backs have been reversed in the bank’s favor due to appeals filed before various appellate authorities. Despite this, several disputes remain unresolved, and Allied Bank is currently involved in ongoing appeals and references before higher tax forums. As a result, the bank has not recorded any provisions against the total sum of Rs. 38,524 million (2023: Rs. 34,841 million), awaiting the final resolution of these cases. The bank’s management has expressed confidence that the appeals will result in a favorable outcome for the institution.
In addition to the income tax assessments, tax authorities have conducted withholding tax audits under Section 161/205 of the Income Tax Ordinance, 2001, covering multiple tax years ranging from 2003 to 2006, 2008 to 2019, and 2022. These audits led to an arbitrary demand of Rs. 2,029 million, a figure that remains unchanged from the previous year. Allied Bank has filed appeals before the Commissioner Inland Revenue (Appeals) [CIR(A)] and the Appellate Tribunal Inland Revenue (ATIR), both of which are still pending. The bank remains optimistic that these appeals will be resolved in its favor, and as such, no provision has been made against the Rs. 2,029 million demand.
Furthermore, Allied Bank has been subject to orders under the Federal Excise Act, 2005, the Sales Tax Act, and the Sindh Sales Tax on Services Act, 2011, for the years 2008 to 2017. These orders have resulted in an additional arbitrary demand of Rs. 1,144 million, which remains unchanged from the previous year. As with the other matters, the bank has filed appeals before CIR(A) and ATIR, and the management is confident that these demands will be dismissed in due course. Consequently, no provision has been recorded against this Rs. 1,144 million.
Despite the ongoing tax matters, Allied Bank remains steadfast in its commitment to legal compliance and transparency. The bank’s management has stated that they are confident of a favorable resolution in all pending cases, emphasizing their belief in the strength of their legal position. As tax matters continue to evolve, the bank remains focused on maintaining a positive track record in tax compliance, ensuring that it adheres to the regulatory framework while safeguarding its financial interests.
In conclusion, Allied Bank’s disclosures underscore the ongoing nature of tax disputes and the bank’s active role in addressing them through legal avenues. While the current tax contingencies present challenges, the bank’s leadership remains optimistic about a successful resolution, reinforcing the institution’s commitment to sound financial practices and regulatory adherence.