Latest news with #SenateStandingCommitteeonFinanceandRevenue
Business Recorder
4 days ago
- Business
- Business Recorder
Budget 2025-26: Senate panel opposes tax on imported solar panels
The Senate Standing Committee on Finance and Revenue opposed on Tuesday the government announced 18% tax on imported solar panels, calling for immediate withdrawal of the proposal made by Finance Minister Muhammad Aurangzeb in his budget 2025-26 speech last week. Aurangzeb proposed the budget for the financial year 2025-26 on June 10, revealing the government's intention to impose 18% sales tax on imported solar panels, arguing that the decision would help the local industry. However, the Senate panel strongly opposed the proposal in Tuesday's meeting chaired by Senator Saleem Mandviwalla. The meeting was also attended by Finance Minister Muhammad Aurangzeb, Minister of State for Finance Bilal Azhar Kayani, Chairman FBR Rashid Mahmood Langrial, and senior officials of attached departments. 'The committee strongly recommended withdrawing the proposed 18% GST on solar panels. Members observed that ahead of the budget, certain stakeholders had imported and dumped solar equipment in anticipation of the tax hike. The chairman emphasised the discriminatory nature of the move, saying the committee rejects the sudden imposition of GST on solar imports and urges immediate withdrawal,' a statement released by Senate Secretariat read. Such debate also took place in the National Assembly's Standing Committee on Finance and Revenue's meeting on Tuesday, according to sources. However, an official statement from the NA was awaited till the time of filing this report. Earlier, Sindh Chief Minister Murad Ali Shah has also condemned the federal government proposal to impose 18% tax on solar panels, calling that 'unjustified'. He presented the provincial budget for the fiscal year 2025-26 on Friday, with the budget size set at Rs3.45 trillion, representing a 12.9% increase compared to the estimated Rs3.05 trillion for the previous year (2024-25). 'This budget will play a key role in unleashing Sindh's untapped potential,' Murad Ali Shah said in the budget speech. 'It prioritises inclusive, sustainable, and robust development.' In the post-budget press conference on Saturday, the chief minister warned that the Pakistan People's Party (PPP) would withhold support for the federal budget if such regressive measures [tax on imported solar panels] were not withdrawn. Pakistan is rapidly emerging as a key leader in solar power deployment, and not just within emerging economies. The South Asian country has boosted solar electricity generation by over three times the global average so far this year, fuelled by a more than fivefold rise in solar capacity imports since 2022, according to data from Ember. That combination of rapidly rising capacity and generation has propelled solar power from Pakistan's fifth-largest electricity source in 2023 to its largest in 2025. Meanwhile, a recent research report stated that China exported more solar panels to Pakistan than to many G20 nations, with over 16 gigawatts (GW) imported in 2024 alone. The report titled 'Leader of One or Leader of None - China's Choice for Clean over Coal in Pakistan' published by think tank Renewables First said more than 39GW of solar panels, nearly all from China, entered Pakistan in the last five years.
Business Recorder
6 days ago
- Business
- Business Recorder
Arrest for tax fraud: Senate panel for defining a threshold
ISLAMABAD: The Senate Standing Committee on Finance and Revenue on Sunday rejected a controversial proposal by the Federal Board of Revenue (FBR) seeking powers to arrest individuals at the investigation stage in tax fraud cases, and recommended for defining a threshold and establish slabs for allowing arrests on tax frauds and imprisonment of up to ten years. The committee, which met under chair of Senator Saleem Mandviwalla to review budgetary proposals related to sales tax laws, strongly opposed the FBR's proposal to allow tax officials to arrest person involved in tax fraud without court approval. Debate took place on Clause 37A, explaining the arrest powers of the Assistant Commissioner which originally allowed Assistant Commissioners to arrest, has now been revised to require prior inquiry and Commissioner's approval for arrest. Minister of State for Finance Bilal Azhar Kiyani clarified that this amendment is a step toward protecting procedural integrity and reducing arbitrary arrests. Tax fraud: IR officers get power of arrest Kiyani stated that they were improving the procedures of allowing arrest in tax frauds under the proposed bill and explained that in the existing provision of Sales Tax under 37 A to prosecute and arrest whereby Assistant Commissioner IR who based on material evidence has reason to believe that any person has committed a tax fraud or any offence warranting prosecution may cause arrest of such person but now under the proposed bill the Assistant Commissioner would have to seek permission of Commissioner to initiate inquiry. He was of the view that the proposed bill placed safeguards to restrict the powers of the FBR. On the threshold of tax frauds, the FBR proposed that there should be a limit of Rs 10 million maximum for allowing arrest. However, Chairman FBR Rashid Mehmood Langrial stated that tax fraud cannot be tolerated at all. A heated debate occurred among Senators and FBR high-ups over whether the arrest in tax fraud to be allowed during the inquiry or after completion of the investigation. Senator Farooq H Naek from the PPP stated that the arrest could only be allowed by the FBR after permission from the judge. The current law permits FBR officials to make arrests during the inquiry stage. However, the FBR proposed in the Finance bill that tax officials can arrest the individuals involved in tax fraud at the investigation stage after completing inquiry. FBR Chairman Rashid Langrial told the committee that the FBR itself has recommended stronger checks on these powers. He revealed that influential individuals, including a former senator, have also committed tax fraud, saying 'We have documented video proofs.' He further revealed that a former Pakistan Customs official, now in FBR custody, had advised a shoe manufacturer on how to commit sales tax fraud, resulting in the evasion of millions of rupees. Senator Naek said only a court of law can authorise the arrest of a person accused of tax fraud. Chairman FBR argued that tax fraud is a criminal offence and that individuals involved in fraud of Rs 1 billion or more deserve arrest. Senator Naek argued that the NAB law was amended because earlier, the arrest was allowed during the inquiry, and now the FBR was proposing sweeping powers. He maintained that any such arrest must be approved by a court. The Finance Bill includes severe penalties for tax fraud: 10 years imprisonment and 100% fines for fraud exceeding Rs. 10 million. Fake invoice generators to be treated as tax fraudsters. Special judges to be empowered to punish offenders Langrial strongly defended the proposed changes in the Finance Bill and stated that if anyone steals a motorcycle, it becomes a cognizable offence, but the Parliamentary Committee was asking not to arrest anyone involved in tax fraud worth millions of billions of rupees. In related decisions, the committee recommended stricter punishments, for five years jail up to Rs 1 billion tax fraud and for frauds above Rs 1 billion, the punishment would increase to ten years in jail. At one point in time, the Chairman FBR stated that if the parliamentary panel was not fine with the proposed safeguards, then they would be fine with the existing powers. The committee advised the FBR to revisit the proposal in consultation with the Attorney General and the Finance Minister and return with revised suggestions. In response to mounting objections over registration rules and arrest powers, Chairman FBR assured a redraft of the relevant provisions. 'We'll review this again and bring a revised version by tomorrow,' said Chairman FBR The FBR has proposed drastic powers, including the sealing of business premises, the seizure of movable property, or the appointment of a receiver for the management of the taxable activity of a person who fails to register themselves. It also proposes to bar operations of bank accounts and transfers for immovable property owners who prefer not to get registered for the Sales Tax. FBR Chairman assured the panel that no sealing or seizure action would be taken without first holding a public hearing, involving tax officials and representatives from business chambers. Copyright Business Recorder, 2025
Business Recorder
6 days ago
- Business
- Business Recorder
Senate body backs zero ST on stationery, okays tax on e-commerce
ISLAMABAD: The Senate Standing Committee on Finance and Revenue recommended to reduce the sales tax on stationery items from 10 percent to zero, besides gave its nod to a proposal imposing sales tax on e-commerce items. The committee continued its third consecutive session on the Finance Bill 2025–26, under the chairmanship of Senator Saleem Mandviwalla, as part of the budget review process for the upcoming fiscal year. The session was attended among others by Federal Minister for Finance and Revenue Muhammad Aurangzeb, Minister of State for Finance Bilal Azhar Kiyani, Chairman FBR Rashid Mahmood Langrial and senior officials from concerned departments. Ministers propose eCommerce tax reforms Opening deliberations on the Sales Tax provisions of the Finance Bill 2025–26, the committee proposed significant reforms. One key recommendation was to reduce the sales tax on stationery items from 10 percent to zero, following concerns from the Stationery Association. The committee gave its nod to a proposal imposing sales tax on e-commerce items, with Chairman FBR clarifying that sales tax is collected from the consumer in e-commerce transactions but often not deposited with the FBR. He further elaborated that courier services will now be designated as collection agents, since they possess the seller's invoice. However, sales tax will not apply to services provided locally. The Finance Bill mandates that all digital vendors, including non-resident businesses, must register in Pakistan if they sell goods digitally through marketplaces, websites, or apps. The committee reviewed new laws on Registration for anyone selling goods online to consumers in Pakistan. Discussion were made on unregistered entities which will face strict enforcement actions Committee members raised concerns about the impact on small and one-time online sellers, prompting Chairman FBR to assure that housewives and those doing one-time transactions will be protected and won't be required to register. Copyright Business Recorder, 2025
Business Recorder
14-06-2025
- Business
- Business Recorder
Aurangzeb tells Senate body: Govt plans foreclosure laws to boost housing finance
ISLAMABAD: In a diplomatic embarrassment for India again, this time the World Bank Board approved $700 million for Reko Diq project – a game changer, which is expected to generate exports worth $2.8 billion by 2028. This was stated by Finance Minister Muhammad Aurangzeb while briefing the Senate Standing Committee on Finance and Revenue. Aurangzeb also announced that government will introduce foreclosure laws to encourage bank-led financing in the housing sector, besides a new mechanism will be developed to eliminate non-filers to document the cash economy. Housing scheme with SBP's help: Rs5bn set aside for mark-up subsidy The committee commenced its first session to deliberate on the Finance Bill, 2025, including the Annual Budget Statement presented in the House, in accordance with Article 73 of the Constitution. The committee meeting chaired by Saleem Mandviwalla, here on Friday. Aurangzeb said that India tried again like it attempted in creating hurdles in the approval of the International Monetary Fund (IMF) loan. This time again India failed. This approval of $700 million which will be provided by the IFC was granted during a World Bank Board meeting in Washington. It is a significant economic diplomatic victory for Pakistan and a major setback for India, which had actively lobbied against the funding. Aurangzeb delivered an overview of the budget, economic progress, and the geopolitical headwinds confronting Pakistan. 'We have not imposed any new tax in the budget. Instead, we have taken new tax measures worth Rs312 billion through compliance and enforcement', said the minister, and confirmed that these steps were endorsed by the IMF under tax enforcement commitments. The finance minister shared economic data remarking that exports have increased by 7.8 percent in the current fiscal year. Last year's exports were $29 billion, this year we have already hit $30 billion in 11 months, he added. He said that there are no longer obstacles to opening Letters of Credit (LCs), and anyone saying otherwise is spreading misinformation. Facing questions on privatisation, Aurangzeb admitted, 'It must be accepted that privatisation targets were not achieved.' However, he reassured the committee that 'PIA has now been brought back into the privatisation stream.' Responding to the long-standing debate on agricultural taxation, he asserted, 'Earlier it was said agriculture tax can never be imposed. Now, they say it can't be collected. We will collect it—just give us the chance.' Provinces are set to begin agricultural income tax collection from July 1, 2025, he added. Copyright Business Recorder, 2025
Business Recorder
11-06-2025
- Business
- Business Recorder
Proposed Finance bill moved in Senate
ISLAMABAD: Finance Minister Muhammad Aurangzeb, Tuesday, moved a copy of the proposed federal budget in the Senate amidst strong protest by the opposition that dismissed the legislative draft as 'anti-poor.' In the brief Senate sitting, the finance minister laid a copy of the proposed Finance Bill 2025, shortly after presenting it in the National Assembly, in the Senate, in accordance with the relevant constitutional provisions, following which, Chairman Senate Yousaf Raza Gilani directed the senators to share their recommendations, if any, on the bill, latest by Thursday, 12 June, 5 pm. The chairman then referred the bill to the Senate Standing Committee on Finance and Revenue with the direction to finalise its recommendations on the bill by Friday, 13 June. Amidst continued sloganeering against the proposed federal budget, the chairman Senate adjourned the House till Friday. The Upper House of the Parliament can hold extensive debate on the finance bill and devise recommendations accordingly, but it has no significant role in budgetary legislation, since it is completely up to the National Assembly to either completely or partially accept those recommendations or reject them, partially or completely. Article 73 of the Constitution of Pakistan, which deals with parliamentary business with respect to money bills, reads a money bill shall 'originate in the National Assembly: Provided that simultaneously when a money bill, including the finance bill containing the annual budget statement, is presented in the National Assembly, a copy thereof shall be transmitted to the Senate which may, within 14 days, make recommendations thereon to the National Assembly.' Copyright Business Recorder, 2025
