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Aftab Maken
ISLAMABAD: The Senate Standing Committee on Finance has approved several key proposals aimed at improving tax compliance and regulating trade practices, including the abolition of Federal Excise Duty (FED) on property sales.
The meeting, held at the Parliament House and chaired by Senator Saleem Mandviwalla, reviewed multiple budget-related proposals. Finance Minister Muhammad Aurangzeb briefed the committee, confirming that the controversial proposal to arrest individuals for attempting tax fraud has been removed from the Federal Budget 2025-26.
Key budget proposals reviewed
- Tax Fraud Punishments Reviewed: The committee debated punishments for tax fraud. Senator Farooq H. Naek suggested reducing the 10-year jail term to 5 years, advocating for a balanced approach. He proposed a system where three show-cause notices are issued and arrests are made only after investigation.
- Ban on Goods Without Tax Barcodes: The committee approved a proposal to ban the sale of products without a tax stamp or electronic seal, especially targeting fake barcoded cigarettes, which will now be seized under the Track and Trace System.
- Protection of Audit Information: New measures were approved to prohibit tax auditors from leaking confidential data and to give the Audit Oversight Board (AOB) powers to inspect auditors’ performance.
- Input Tax Adjustment Proposal Rejected: The committee rejected a proposal to bar input tax adjustment for unregistered buyers making purchases below Rs 100 million, citing concerns from stakeholders.
FATA-PATA tax exemptions deferred
The proposal to withdraw sales tax exemptions from FATA and PATA was postponed. The committee will receive a detailed briefing from the finance minister on this matter.
Senator Shibli Faraz questioned the benefit of such exemptions to local populations and asked the FBR to present data. Senator Mohsin Aziz backed the withdrawal of the exemption, stating that their provincial concerns were consistently ignored in favor of political compromises.
Support for diplomats, global agencies
The committee approved continued tax exemptions for diplomatic missions and international organizations working in Pakistan.
Concerns on E-commerce taxation
Senator Anusha Rahman raised concerns over the sales tax registration requirement for small local e-commerce platforms, stating that this could harm employment generated by online businesses. She said the government had failed to bring larger retailers into the formal tax net, while imposing restrictions on startups and small online sellers.
