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• Proposes raising purchase limit for filers from 130pc to 400pc of declared wealth
• Tax approved on previously exempt luxury private clubs
• Proposed e-commerce tax rejected; tax on online academies approved
ISLAMABAD: A parliamentary committee has recommended raising the threshold limit for purchases made by “eligible individuals” — a new term for people who file their tax returns — and approved a measure to tax luxury clubs nationwide.
The development came as the Senate and National Assembly Standing Committees on Finance and Revenue held simultaneous sessions at Parliament House to conduct a clause-by-clause review of the Finance Bill 2025-26.
Chaired by Senator Saleem Mandviwalla and MNA Naveed Qamar respectively, both panels proposed several amendments and rejected some measures outright.
The Senate standing committee expressed concern over the newly inserted clause in the Finance Bill, which restricts the “eligible person” from making any purchase exceeding 130 per cent of the wealth reflected in their last year’s wealth statement.
Senator Mohsin Aziz argued for increasing this limit, suggesting that filers with Rs10 million should be able to purchase property worth Rs50m. After discussion, the committee recommended raising the limit to 400pc of the previous year’s wealth declaration, significantly expanding purchase capacity for filers.
The Senate committee also approved a proposal to impose taxes on major private clubs across the country. In the Finance Bill 2025-26, income tax has been introduced on recreational clubs, which were previously exempted from tax.
State Minister for Finance and Revenue Bilal Azhar Kayani stated that the recreational clubs are liable to pay tax, where their income exceeds the expenditure and such steps have been taken to broaden the tax net of the country.
FBR Chairman Rashid Mahmood Langrial said that many elite clubs serve as luxury spaces for affluent individuals. He highlighted that these clubs have accumulated billions of rupees in their accounts while providing extravagant services.
“Some clubs hold land valued at millions of dollars, yet only a handful of individuals benefit from these lavish facilities,” he said.
The proposed taxation will target the profits generated by these high-end clubs, ensuring that they contribute to the national revenue system, he added.
The FBR chairman informed the committee that a monthly income of Rs100,000 would only incur a tax of Rs1,000, stressing that the burden was manageable.
Senator Mohsin Aziz, however, pressed for raising the exemption threshold to Rs1.2m per year, citing inflation, while Senator Shibli Faraz highlighted how currency depreciation has eroded the real value of money.
Discussing the proposed tax on e-commerce, the committee argued that any levy should apply to goods rather than services. Senator Anusha Rahman opposed the government’s move altogether, criticising her own party’s approach for targeting online businesses instead of traditional retailers. Consequently, the committee rejected the tax on e-commerce.
However, the committee approved a tax on online educational institutions and academies, citing their substantial earnings. The FBR chairman said some academies generate up to Rs20m a month and stressed that teachers earning through online platforms must pay taxes.
Finance Minister Muhammad Aurangzeb also highlighted the newly introduced mortgage facility, stating that mortgages will be available for houses up to 2,000 square feet, and the individuals will also be eligible for tax credit not exceeding 30pc of their total income.
Commenting on the FBR’s new condition of disallowing 10pc expenditure for purchases from unregistered suppliers, the Senate committee warned that this could stifle competition, as the number of registered suppliers remains low across the country.
Commerce Secretary Jawad Paul briefed the National Assembly’s standing committee on the new Five-Year Tariff Policy (2025-30), which proposes reducing customs duties and additional duties over five years, with an estimated revenue impact of Rs500 billion.
Mr Aurangzeb noted that the government had previously increased duties to manage its balance of payments crisis and curb imports, which also boosted revenue collection. However, even after the crisis stabilised, duties were not reduced, prompting a need for structural reforms.
Published in Dawn, June 19th, 2025
