Islamabad:
The Senate Standing Committee on Funding was informed on Thursday that the federal government has decided to abolish tax exemptions for special economic zones (SEZs) and special technological zones (STZs) in accordance with the IMF conditions.
During a meeting that was chairman of Senator Saleem Mandviwalla on Thursday, the Federal Board of Revenue (FBR) chairman Rashid Mahmood Langrial, the committee, which under the IMF Agreement, informed all tax exemptions will be phased out by 2035.
He declared that no SEZ or STZ will receive any tax relief. “Our hands are bound,” Langrial noted, adding that tax change and reduced rates across different sectors are withdrawn.
The committee rejected budget proposals for the next financial year, including the introduction of a carbon tax of RS2.50 per year. Liters of petroleum products, which removed the cap of 10 per cent. On the debt service for electricity consumers and introduces a tax on small vehicles. The senators called these measures as burdensome to the public.
In terms of autonomous public units, Senator Anusha Rahman raised concerns about institutions holding large investments despite minimal staff.
She quoted the example of the Evacuee Trust Property Board (ETPB), which she said is administered by only 12 people but has RS13 billion invested. She questioned why such institutions are allowed to retain and invest their revenue and called for reforms or exceptions to the Public Economy Act (PFMA) if necessary.
The officials replied that bodies such as Nadra, CDA and Karachi Port Trust are allowed to invest their funds and make profits and they pay tax on this earnings. However, the committee chairman said that none of these institutions had actually paid tax recently.
The officials informed the committee that Nadra had paid a tax of RS8 billion over the past two years.
The FBR chief proposed changes to PFMA, but the committee opposed them and insisted that revenue from all state-owned bodies should be deposited in the federal consolidated fund.
The Ministry of Finance stated that the proposed change would allow autonomous bodies to preserve and use their income independently, but Anusha Rahman opposed it strongly and demanded that such entities remain responsible to the National Ministry of Finance and sought balance in such institutions.
The committee also reviewed changes in property taxation. According to FBR officials, the withholding tax on real estate sales is valued at RS100 million. For properties that are valued below RS50 million, the rate will be 7.5 percent.
In addition, Finance Bill 2025 includes stricter measures against non-file. While the property purchase tax for non-file has been reduced, the burden has changed to sellers.
The committee approved a proposal to introduce a 5 percent tax on foreign online platforms.
