Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial on Thursday, in a meeting chaired by Senator Saleem Mandviwalla, said that in line with the IMF conditions, all tax exemptions must be discontinued by 2035.
Langrial said, “Our hands are tied.” Declaring that in the future no SEZ or STZ will get any sort of tax exemption. He also added that countless sectors that were exempt from taxes and would get tax breaks and lower tax rates will not anymore.
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A carbon levy of Rs2.50 per litre on petroleum goods, the removal of the 10% cap on the debt service cost for electricity users, and the introduction of a tax on small cars were among the budget ideas for the upcoming fiscal year that were rejected by the committee. The senators described these policies as burdensome for citizens.
Senator Anusha Rahman expressed concerns about the independent public sector bodies and how a lot of investments go to institutions that have the least amount of staff.
She gave an example of the Evacuee Trust Property Board (ETPB), which only has a 12-person staff yet has Rs13 billion invested. She asked why institutions like these can invest and keep their revenues; in addition, she urged the Public Finance Management Act (PFMA) to be amended or exempted if necessary.
According to the officials, organizations like Nadra, CDA, and Karachi Port Trust are permitted to invest their money, make money, and then pay taxes on that money. But according to the chairman of the committee, none of these organizations has lately made any tax payments.
The official also added that a tax of approximately Rs.8 billion was paid by Nadra in the last 2 years.
The committee rejected the changes to the PFMA suggested by the FBR chief. The committee argued that all government-owned company revenues should go into the Federal Consolidated Fund.
Anusha Rahman was strongly against the changes in the amendment proposed by the Ministry of Finance, as it would have given independent bodies the permission to spend and retain their money freely. She urged that such bodies should remain answerable to the national treasury and asked for a balance sheet as well.
Proposed modifications to property taxes were also examined by the committee. The withholding tax on real estate sales over Rs100 million has been raised from 8% to 9.5%, while properties under Rs100 million would only be subject to 8.5% tax, according to FBR authorities. The rate will be 7.5% for properties worth less than Rs50 million.
Non-filers will face harsh measures under the Finance Bill 2025. Even though for non-filers the property purchase tax has been decreased, sellers now have to face the load. The 5 per cent tax on foreign online platforms suggestion has been accepted by the committee.
