Islamabad (HRNW)-\u00a0The Senate Standing Committee on Finance has approved proposals included in the Finance Bill to impose tax on profits earned from insurance policies, while also reviewing a range of tax reforms and financial measures.<\/p>\n
According to details, the committee examined various clauses of the Income Tax Ordinance 2001, tax laws, and proposed financial reforms. Officials from the Federal Board of Revenue (FBR) provided detailed briefings and clarifications regarding the proposed changes.<\/p>\n
Federal Finance Minister Muhammad Aurangzeb told the committee that Pakistan needs to move toward a new business model. He highlighted that the super tax has been reduced, financing opportunities have been expanded, and significant reforms are being introduced in the operational structure of the FBR.<\/p>\n
During the meeting, FBR Chairman informed lawmakers that the organization is moving toward digital monitoring of business activities. He said that instead of deploying FBR officials in industrial units, a modern digital monitoring system will be implemented. Industries that choose not to become part of the proposed system may face an additional two percent tax.<\/p>\n
The committee was informed that insurance policies that have completed seven years or mature after seven years would remain exempt from the newly proposed tax.<\/p>\n
Committee Chairman Saleem Mandviwala emphasized that repeatedly reintroducing systems that have previously failed is not a sustainable solution. He also sought details regarding various tax administration experiments conducted by the FBR over the last decade.<\/p>\n
Representatives of the Large Scale Manufacturing Association expressed serious concerns regarding the proposed refund mechanism, arguing that industries are already facing substantial financial pressure. They stated that large industrial units are paying electricity bills ranging from Rs150 million to Rs170 million per month, while some smaller units are also facing exceptionally high energy costs.<\/p>\n
Industry representatives warned that the proposed refund system could create additional challenges for manufacturers and negatively affect industrial activity and growth.<\/p>\n
The meeting also discussed the decline in exports. Saleem Mandviwala suggested increasing the tax rate on exporters to one percent and proposed that the one percent levy be treated as a final tax.<\/p>\n
Representatives of the telecom sector also criticized the tax burden on businesses, arguing that the FBR is relying heavily on taxation to meet revenue targets. During the discussion, the committee sought assurances from telecom companies regarding compliance if advance tax rates are increased. Telecom representatives assured the committee of their cooperation and agreed to provide written commitments.<\/p>\n
The committee is expected to continue reviewing additional Finance Bill provisions in upcoming meetings before final recommendations are submitted.<\/p>\n
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