Latest news with #FederalBoardofRevenue
Business Recorder
5 hours ago
- Business
- Business Recorder
Budget FY25-26: Finance bill still being discussed, says FBR
The Federal Board of Revenue (FBR) on Friday said the Finance Bill 2025 was still being discussed in the National Assembly (NA) and among various business circles. The FBR's statement comes as 'a number of news stories in the digital and print media give the impression that some of the amendments introduced in the finance bill are not understood well by the public at large', the tax body said. 'For instance, the legal provisions for the arrest of those involved in a tax fraud have already been provided under Section 37A of the Sales Tax Act, 1990 along with an elaborate procedure to be followed after the arrest which involves intimating the Special Judge immediately and the production of such person before Special Judge within 24 hours. 'However, the proposed amendment now restricts the powers of the officer to arrest by making prior inquiry after approval of the Commissioner Inland Revenue (CIR). Only on the basis of the findings of the inquiry CIR will authorise the investigation which would give the investigation officer the powers of an officer in charge of a police station under Code of Criminal Procedure, 1898 (Act V of 1898),' the FBR said. Key highlights of Pakistan budget for 2025-26 The arrest could only be made with the prior approval of CIR if the investigation officer had reasons to believe that a tax fraud might have been committed by a person, the statement added. According to the tax body, the new legal provision further provides that if the arrest is mala fide the matter will be referred to the Chief Commissioner for fact finding inquiry. 'This shows that in contrast to the earlier provision where an Assistant CIR could arrest an offender, the new provisions bring transparency in the process by a mandatory prior inquiry and investigation and finally permission by the CIR. 'Moreover, certain changes and amendments are also necessary to reassure the compliant taxpayers that those evading taxes or involved in tax fraud are dealt with by the state with an iron hand.' FBR chairman Rashid Mahmood Langrial has expressed his willingness to discuss the recent changes made in the tax laws and introduce changes wherever needed, for example, the provisions related to arrest could be revised to mandate the permission of multiple senior officers before any arrest. 'Furthermore, in order to ensure that these powers are not misused by the authorised tax officers against the compliant taxpayers and business community, the Honorable Prime Minister Shehbaz Sharif has formed a high powered committee, which will be headed by Minister for Finance and Revenue, to re-evaluate the proposed amendments and suggest adequate safeguards to prevent potential misuse of powers.' Budget 2025-26: Pakistan targets 4.2% growth as Aurangzeb presents proposals 'for a competitive economy' The other members of the committee will include Ministers of Law and Economic Affairs Division, Minister of State for Finance, SAPM Industries and Chairman FBR, as per the statement. 'The committee will also examine various options to ensure that legal economic activities are not stifled and propose additional protective measures against unlawful use of authority. The committee will submit its recommendations to the Honorable Prime Minister in three days.' **
Express Tribune
19 hours ago
- Business
- Express Tribune
NA panel reviews FBR powers
The National Assembly Standing Committee on Finance on Thursday directed the Federal Board of Revenue (FBR) to incorporate safeguards before closing bank accounts of unregistered businesses, amid widespread tax evasion and underreporting by businesspeople. The committee, which met here with its chairman Syed Naveed Qamar in the chair, reviewed the FBR's proposed measures to enforce sales tax compliance, including the disconnection of utilities and temporary freezing of bank accounts for non-filers. During the meeting, FBR Chairman Rashid Mahmood Langrial gave a briefing to the committee. He said that unregistered businessmen would not be able to operate a bank account under sales tax laws, adding that such a person would be served a notice prior to the closure of the bank account. "The bank account of an unregistered person will be reactivated within two days after registration," he said. He revealed that out of 300,000 industrial units in Pakistan, only 30,000 to 35,000 were registered with the authorities. Explaining reasons, he acknowledged that the tax rate in Pakistan was high. "One-third of manufacturers are not registered in sales tax. People who even come under the tax net do not file returns," Langrial said. "Those who pay taxes underreport their incomes," he told the committee. "Electricity theft alone costs Rs500 to 600 billion every year." When asked how the FBR would identify businesses not paying sales tax, the FBR chairman explained that the income declared for income tax purposes would be used to estimate the volume of sales, supplies and overall business activity. Action would then be taken against individuals who fail to register, he added. Committee member Javed Hanif supported the FBR's proposals but the committee chair cautioned against enacting a law aimed at catching tax evaders if it also adversely affects compliant businesses. Another Committee member, Sharmila Farooqi, suggested that instead of making the penalties more stringent, the taxpayers should be given incentives. "Reduce the tax rate. It will broaden the tax net and encourage the people to get them registered. Finance Minister Muhammad Aurangzeb replied that the tax threshold and process would be improved. however, he made it clear that tax exemptions and amnesties would not be given anymore. "The time for tax exemptions and amnesties has passed. People have to be brought into the tax net." Langrial urged the committee to allow the FBR to temporarily deactivate the bank account of unregistered businessmen. The committee, however, directed for including safeguards in the process. Petroleum levy Meanwhile, the committee approved a proposal to increase the rate of petroleum development levy (PDL) to Rs90 and impose carbon levy on petrol, diesel and furnace oil. Finance Ministry officials told the committee that there was a proposal to impose the PDL on furnace oil as well. The officials said Rs100 billion in revenue was expected from the PDL on furnace oil. They added that 1.2 million tons of furnace oil was imported for 1,000MW Independent Power Producers (IPPs). The Power Ministry secretary said that the target of PDL recovery in fiscal 2025-26 was set at Rs1,468 billion. The Finance Ministry officials said that the government expected Rs45 billion in revenue through the carbon levy. The committee chair asked how much amount the Centre would get if the levy was turned into a carbon tax. On that the officials said that the amount in that case would be Rs18 billion. The committee was informed that the entire amount of a levy went to the federal government, but in taxes, provinces also get share. The chair stressed that the committee was not taking any decision regarding a levy or a tax on petroleum products. The industries secretary told the committee that Rs10 billion from carbon levy would be spent of the promotion of electric vehicles. He added that 30% of the vehicles would be shifted to electric vehicles by 2030. The production of all types of vehicles in the country is around 150,000, the officials said, adding that there were 76,000 electric vehicles in the country at present. "In the next five years, the production of electric vehicles will be increased to 2.2 million," the secretary said.
Business Recorder
21 hours ago
- Business
- Business Recorder
FBR chief urges Senate body to abolish 7th Schedule of ITO, bring banks into normal tax regime applicable to companies
ISLAMABAD: Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial, Thursday, strongly recommended Senate Standing Committee on Finance to abolish Seventh Schedule (Banking Schedule) of the Income Tax Ordinance 2001 and bring banks into normal tax regime applicable to companies. The FBR chairman expressed serious concern over special tax treatment to the banking companies. 'Banking Schedule must be abolished from the income tax law', Rashid Mahmood said. He stated that the banks should be treated like any other company. 'Why the banks be given totally different tax treatment as compared to other registered companies', the FBR chairman questioned. 'Tax laws cannot be dictated to the government by any particular sector', the FBR chairman criticised. In 2007, this schedule was inserted in the Income Tax Ordinance 2001, which needs to be deleted, the FBR chairman said. Langrial stated that the banks are engaged in business and why we are applying different tax laws on banks. Seventh Schedule (Banking Schedule) of the Income Tax Ordinance should not remain part of the tax law and it should be abolished from the Income Tax Ordinance. Banks should not be given different tax treatment, the FBR chairman said. While review of the Finance Bill (2025-26) on Thursday, the taxation issue of banking sector was discussed in detail at the Senate Standing Committee on Finance and Revenue, under the chairmanship of Senator Saleem Mandviwalla. FBR Member Inland Revenue (Operations) Hamid Atiq Sarver was specially invited to explain banking related amendments in the Finance Bill (2025-26). When Mandviwalla asked the Securities and Exchange Commission of Pakistan (SECP) chairman about the legal status of banks, Akif Saeed informed the committee that the banks are registered like any other company. The FBR Member Inland Revenue (Operations) explained in detail all legal and technical amendments relating to the banking schedule of the Income Tax Ordinance 2001. Later, amendments were approved by the committee. Chairman of the committee Saleem Mandviwalla questioned the performance of the anomaly committees constituted by the FBR. The FBR has formed two anomaly committees to identify and remove the technical and legal anomalies in the Finance Bill 2025. Mandviwalla stated that the anomaly committees have failed to address the issues raised by the business community. The anomaly committees do not rectify errors in tax laws. The FBR chairman responded that this year we are bound due to IMF programme. The chairman of the committee also recommended deletion of Special Economic Zone (SEZ) Act, keeping in view government policy for not granting or extending tax exemptions. Some SEZs are fully operational and some are partially working. What is the fate of the SEZ after withdrawal of tax exemptions, he raised question. The government should terminate SEZ Act as it has become redundant in the absence of new tax exemptions. The FBR is not giving new exemptions and it would create problems for the new SEZs. Therefore, the law should be abolished. The government should refrain from giving fresh approvals to the SEZs, he added. On the proposal of the FBR for three years limit on audit of a taxpayer, Mandviwalla noted with concern that it is a general practice of the FBR to conduct multiple audits of taxpayers even in cases where simple explanation is required. A school of Islamabad has been audited by the FBR for the last three years, he added. Copyright Business Recorder, 2025
Business Recorder
21 hours ago
- Business
- Business Recorder
Experts urge FBR to broaden tax base to meet FY26 target
ISLAMABAD: Experts recommended that Federal Board of Revenue (FBR) needs to increase the tax base to achieve revenue target of Rs14.1 trillion in 2025-26 without burdening existing taxpayers. Pakistan's numbers tell a compelling story with only 5.9 million tax filers out of 71 million workforce (8.4 percent, tax filer to workforce ratio), while banks hold 177 million accounts, with 137 million unique account holders (60% of adult population), and Rs32.7 trillion in deposits (as of May 2025)—all with complete KYC data with the Banks. These figures were shared by former minister for Interior and Commerce GoharEjaz on X formerly known Twitter. He sated FBR needs help to find non-tax filers. This is where they need to look: total tax filers in Pakistan 5.9 million (2024-25), individuals (5.8 million), Business Partnerships (AOPs) ( 104,269) and companies (87,900). Ejaz further stated that FBR doesn't need to tax existing filers more—it needs to expand the tax base. With withholding taxes at Rs. 1.59 trillion and voluntary payments at Rs. 1.12 trillion (first half of 2024-25), the compliant are already contributing. 137 million unique bank account holders vs 5.9 million tax filers is a stark low number, he added. FBR must target non-filers—going after existing taxpayers will not work as they're already overburdened. Banks have comprehensive KYC data on account holders with substantial deposits. Non-filers' complete account details, transaction histories, and financial profiles are readily available. Smart governance means using available data intelligently. The path to Pakistan's revenue targets lies not in over-burdening the 5.9 million compliant taxpayers, but in identifying and bringing the remaining 131 million bank account holders with significant financial footprints into the formal tax system, Ejaz added. Copyright Business Recorder, 2025
Express Tribune
a day ago
- Business
- Express Tribune
Senate passes Civil Servants Amend Bill
The Senate on Thursday passed the Civil Servants (Amendment) Bill, 2025, aimed at enhancing transparency and enabling public access to asset declarations of senior government officials. The bill, moved by Senator Azam Nazeer Tarar on behalf of Senator Ahmed Khan Cheema, Minister for Establishment, seeks to amend the Civil Servants Act, 1973, as reported by the Standing Committee. The legislation is intended to further operationalise the Government Servants (Conduct) Rules, 1964 — specifically Rules 12, 13, and 13-A — and align them with the provisions of the Right to Information Act, 2017. Under the proposed framework, asset declarations of officers in Basic Pay Scale (BPS) 17 to 22 — including assets beneficially owned domestically or abroad by the officials or their family members — will be filed digitally and made publicly accessible. The bill provides that sufficient safeguards will be ensured to protect sensitive personal information, such as national identity numbers, residential addresses, and bank or bond account numbers. The Federal Board of Revenue (FBR) will maintain the digital platform, while the Establishment Division will be equipped with a robust framework, resources, and tools to conduct risk-based verifications of the submitted declarations. Meanwhile, senators expressed grave concerns over the country's fiscal policies, particularly the imposition of taxes on essential sectors and the economic hardships facing ordinary citizens. While participating in the general discussion on Budget 2025-26, Senator Dost Ali Jeesor criticized the 18 percent solar tax, calling it unfair and burdensome on low-income families who invest in solar panels and batteries. He called for the total elimination of the tax, asserting that the recent cut — lowering the GST on solar panels by more than 10 percent from the previous 18 percent — remains insufficient. Senator Muhammad Abdul Qadir presented an overview of the federal budget, said that we would need more loans to finance ongoing development projects, pension disbursements, and social welfare programs like BISP. He cautioned that Pakistan's debt servicing costs are alarmingly high, with interest payments consuming 30 to 35 percent of loans taken by successive governments. Jam Saifullah pressed for the commencement of the long-delayed M-6 Motorway project, criticizing insufficient PSDP allocations. He also raised environmental concerns, opposing taxes on electric and hybrid vehicles, which he said undermine national climate goals. Furthermore, he called for increased support for salary earners and pensioners to fight inflation. Senator Haji Hidayatullah Khan highlighted the disproportionate tax burden on the poor, deeming the 10 percent pay raise for government employees inadequate in the prevailing economic crisis. He warned of declining agricultural productivity and stressed urgent government intervention to revive the sector. Calling solar energy a vital resource for Pakistan's future, Hidayatullah demanded the removal of taxes on solar panels to encourage wider adoption. Citing a World Health Organization report, he stressed that 45 percent of people live below the poverty line and over 270 million children remain out of school, underscoring the urgent need to prioritize education and healthcare.
