Islamabad : The Senate Standing Committee on Finance and Revenue 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 drew participation from key government figures including Federal Minister for Finance and Revenue Muhammad Aurangzeb, Minister of State for Finance Bilal Azhar Kiyani. Chairman FBR Rashid Mahmood Langrial, Secretary Commerce Division Jawad Paul and senior officials from concerned departments.
Senators Farooq Hamid Naek, Syed Shibli Faraz, Anusha Rehman Ahmad Khan,Ahmed Khan, Mohsin Aziz, and Mohammad Abdul Qadir were also in attendance.
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% 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.
Harsh Penalties Proposed for Tax Fraud Spark comprehensive debate .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
Debate also 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.”
While the move was presented as a reform, it drew sharp skepticism from lawmakers.
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 Senate Standing Committee’s review of the Finance Bill 2025–26 remains ongoing, with the next session continuing to study the Sales Tax Provisions.
Sohail Majeed is a Special Correspondent at The Diplomatic Insight. He has twelve plus years of experience in journalism & reporting. He covers International Affairs, Diplomacy, UN, Sports, Climate Change, Economy, Technology, and Health.
