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The Senate Standing Committee on Finance convened a meeting here on Tuesday and chaired by Senator Saleem Mandviwalla. Senator Shibli Faraz noted that the required members of the committee were not present to complete the quorum, suggesting the meeting be postponed.
No members from Pakistan People’s Party (PPP), Pakistan Muslim League-Nawaz (PMLN), MQM Pakistan, or other parties attended the meeting.
Subsequently, the Senate Standing Committee on Finance meeting was postponed, and the Tax Laws Amendment Bill 2024 will be reconsidered in the next session.
During the briefing on the Tax Laws Amendment Bill, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial stated that businesses would be sealed, and movable property seized if they were not active taxpayers.
He clarified that no new taxes had been introduced in the bill. Instead, it addresses non-filing and under-filing issues, emphasizing a significant disparity between income declarations and expenses. Most businesses, he said, are either unregistered or pay minimal taxes. The use of technology in sales tax registration has been increased.
The FBR Chairman assured that the new proposals would not affect 95% of people and projected that the tax-to-GDP ratio would rise to 18% within five years.
Senator Saleem Mandviwalla highlighted that businesspeople are fearful of sales tax registration and lack awareness about it.
Finance Minister Muhammad Aurangzeb mentioned that the FBR’s performance would be reviewed, with a report expected by June. He added that businesses had been consulted regarding the bill.
Senator Shibli Faraz remarked that the public wants tax revenues to be spent on their welfare, criticizing the language used, such as “tightening the noose,” “shutting off phones,” and “freezing accounts,” as inappropriate. He stressed that there is a trust deficit between the public and the government, and harsh measures to enforce tax compliance are not the right approach.
The Finance Minister emphasized rebuilding trust between the tax authority and taxpayers, ensuring an end to corruption, and reorganizing the FBR. He stated that non-taxpayers are being brought into the tax net, and every individual must contribute to the economy. The tax-to-GDP ratio, currently at 10.3%, is targeted to increase to 13.5% within three years.
The Finance Minister also announced plans to reduce the size of the government and separate the FBR’s policy unit. He pointed out that the neighboring country has a tax-to-GDP ratio of 18.5%, highlighting the constraints faced by Pakistan as a nation.
