ISLAMABAD: The Senate Standing Committee on Finance, during a meeting on Wednesday, reviewed the Finance Bill 2025 and proposed several amendments, including tax relief for low-income earners and small online business operators.
Chaired by Senator Saleem Mandviwala, the committee recommended zero-rated tax for individuals earning up to Rs1.2 million annually, rejecting the Federal Board of Revenue’s (FBR) proposal to impose taxes on those operating small-scale online businesses.
However, the committee approved the taxation of online academies and teachers who are reportedly earning between Rs20-30 million through digital platforms. FBR officials said the proposed tax would also apply to a wide range of digital services including e-commerce, music and video streaming, telemedicine, e-learning, cloud computing, online banking, accounting, and consultancy services.
FBR Chairman Rashid Langrial stated that a new clause in the Finance Bill aims to bring all individuals providing internet-based services under the tax net. He clarified that someone earning Rs1.2 million annually would pay Rs12,500 in taxes.
Despite FBR’s push, the committee rejected the proposal to tax the income of the Islamabad Club, a move that FBR said would have targeted luxury entertainment clubs benefiting only a select few. Langrial stressed that Islamabad Club served just 300 people and should not be exempt from taxation. The committee disagreed.
Senator Shibli Faraz argued that no taxes should be imposed on annual incomes ranging from Rs600,000 to Rs1.2 million, supporting greater relief for the middle-income segment.
The FBR also proposed imposing restrictions on non-filers, limiting their property purchases to 130% of their declared income. However, Senator Mohsin Aziz suggested raising the cap to 500%, which the committee agreed to recommend.
Finance Minister Muhammad Aurangzeb, addressing the committee, said that efforts are underway to bring non-filers into the tax net to expand revenue collection without burdening compliant taxpayers.
The committee’s recommendations will now be reviewed before final approval of the Finance Bill 2025.
