ISLAMABAD: Parliamentary panels on Monday rejected several proposals aimed at granting broader powers to station tax officials at factory premises while approving others that mandate income declarations to help formalise the cash economy.

The Senate and National Assembly Standing Committees on Finance and Revenue held simultaneous meetings to conduct a clause-by-clause review of the Finance Bill 2025-26, proposing amendments or rejecting certain measures outright.

Senator Saleem Mandviwalla and MNA Naveed Qamar chaired their respective committees, which were attended by senators and members of the National Assembly (MNAs) at the Parliament House.

The parliamentary panel of the National Assembly has rejected the proposal to deploy FBR employees to monitor industrial production. Mr Qamar stated that FBR should not be granted authority to deploy personnel from the police, Rangers, or Intelligence Bureau, adding that such powers are a means to “line the pockets” of FBR officials.

Parliamentary panels propose key amendments to Finance Bill

The committee turned down the proposal to station FBR staff in industries to monitor production.

MNA Mirza Ikhtiar Baig remarked that assigning police officers to factories would be an insult to the business community. “If police officials show up at my factory tomorrow, I will lock it down,” he warned.

Sharmila Faruqi said the proposal would turn FBR into a second NAB. But Finance Minister Muhammad Aurangzeb responded that efforts are underway to improve FBR’s public image.

“If you post an FBR watchman at business premises, people will shut down their operations,” said MNA Omar Ayub Khan. He further alleged that Rs550 billion worth of smuggling is taking place in the petroleum sector “right under your nose,” and similar conditions exist in other industries, added the opposition leader.

The FBR chairman responded that Rs39bn in additional revenue had been collected from monitoring the sugar sector, with an annual impact of Rs48bn.

Tax waivers for SEZs

Meanwhile, the committee approved the proposal to end tax exemptions for Special Economic Zones (SEZs) by 2035, while supporting tax relief for non-profit organisations. The FBR Chairman Rashid Mahmood Langrial stated that non-profits would be reviewed to ensure they are not engaged in commercial activities.

The committee deferred the proposal to share banking information of high-risk individuals with FBR. The FBR chairman said that if someone earns Rs10m monthly, but makes transactions worth Rs100m, a notice would be issued. The committee approved the proposal to waive the requirement of disclosing sources of income for property purchases up to Rs10m.

Minister of State Bilal Azhar Kayani stated that a cap of 130pc of declared income has been proposed for taxpayers seeking to purchase property. He said if someone intends to purchase property worth Rs13m, they must declare an income of at least Rs10 million. Taxpayers would also need to file online declarations for any portion of the funding derived from loans, gifts, or other sources.

The parliamentary panel of the Senate continued deliberations on the Sales Tax Provisions of the Finance Bill 2025-26 on Monday.

Senator Farooq H. Naek proposed multiple legal refinements, including reducing penalties for tax fraud from Rs10m to Rs5m, reducing the sentence from 10 years to 5 years, requiring the issuance of three separate notices before prosecution, mandating the High Court to decide tax appeals within 60 days and separating inquiry, investigation, and court trial phases. Penalties must be proportionate and not politicised, he added.

Published in Dawn, June 17th, 2025