Islamabad:
The senatorial finance committee was informed Thursday that the federal government has decided to abolish tax exemptions for special economic areas (ZES) and special technological zones (STZ) in accordance with the conditions of the IMF.
During a meeting chaired by Senator Saleem Mandviwalla on Thursday, the president of the Federal Revenue Council (FBR), Rashid Mahmood Langrial, informed the committee according to which under the IMF agreement, all tax exemptions must be deleted by 2035.
He said that in the future, no ZES or Stz will receive a form of tax relief. “Our hands are linked,” said Langrial, adding that tax concessions and reduced rates in various sectors are withdrawn.
The Committee has rejected budgetary proposals for the next financial year, in particular by imposing a carbon tax of RS2.50 per liter on petroleum products, removing the 10% ceiling on the supplement of debt service for electricity consumers and introducing a direct debit on small vehicles. Senators qualified these burden measures for the public.
With regard to the autonomous entities of the public sector, Senator Anusha Rahman has raised concerns concerning institutions with large investments despite a minimum of personnel.
She cited the example of the Evacuee Trust Property Board (ETPB), which, according to her, is managed by only 12 people, but that 13 billion rupees have invested. She asked why these institutions are authorized to keep and invest their income and have called for reforms or exemptions in the law on public finance management (PFMA) if necessary.
Officials replied that organizations such as Nadra, CDA and Karachi Port Trust are authorized to invest their funds and make profits, and they pay taxes on these profits. However, the chairman of the committee said that none of these institutions had really paid taxes recently.
The officials informed the committee that Nadra had paid a tax amounting to 8 billion rupees in the past two years.
The head of the FBR proposed changes to the PFMA, but the committee has opposed it, emphasizing that the income from all organizations belonging to a government must be filed in the Federal Consolidated Fund.
The Ministry of Finance said that the proposed amendment would allow autonomous organizations to preserve and spend their income independently, but Anusha Rahman has firmly opposed it, demanding that such entities remain responsible for the national treasury and sought the balance sheets of these institutions.
The Committee also examined the proposed changes to land taxation. According to FBR officials, the restraint to restraint on sales of goods worth 100 million rupees increased from 8%to 9.5%, while properties of a value of less than 100 million rupees will be taxed at 8.5%. For the properties evaluated below 50 million rupees, the rate will be 7.5%.
In addition, the 2025 financial bill includes stricter measures against non-subfiors. Although the property purchase tax for non-selectors has been reduced, the burden has moved to the sellers.
The Committee approved a proposal to impose a 5% tax on foreign online platforms.
