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Express Tribune
11 hours ago
- Business
- Express Tribune
Senate panel rejects tax on online businesses
The Senate Standing Committee on Finance reviewed the Finance Bill 2025 on Wednesday and recommended a zero-rated tax on the income of up to Rs1.2 million and rejected a proposal to impose tax on individuals doing small online businesses. During a meeting, chaired by its chairman Saleem Mandviwala, the committee approved the proposal to impose tax on the income of online academies and teachers but opposed the levy of tax on the income of the Islamabad Club. Federal Board of Revenue (FBR) officials informed the meeting that teachers were providing online digital education services, earning Rs20-30 million. They added that a new clause had been introduced in the Finance Bill to impose tax on those doing e-commerce business, using online marketplaces. All individuals providing services via the internet and electronic networks will be affected, FBR officials said. They added that the tax will also apply to music, audio and video streaming platforms, cloud services, online software application providers, telemedicine and e-learning services. The tax would also be imposed on online banking services, architectural design services, research and consultancy reports, accounting services and other online facilities in the form of digital files, the FBR officials stated. The committee rejected a proposal to tax individuals doing small online businesses. The FBR chairman said that those with an annual income of 1.2 million will have to pay Rs12,500 in taxes. Committee member Senator Shibli Faraz said that there should be no tax on the income of Rs600,000 to Rs1.2 million. FBR Chairman Rashid Langrial told the committee that it had been decided to collect tax from entertainment clubs, including the Islamabad Club. However, the committee chair opposed the move. Langrial said that the common man did not benefit from this club, as it was the luxury of 300 people. The FBR officials said that there was a proposal to impose restrictions on the purchase of property and vehicles by non-filers. They added that a limit of 130% of the income had been set for the purchase of property by the non-filers. Senator Mohsin Aziz said that the limit of 130% for the purchase of property by non-filers should be increased. The committee recommended increasing the limit to 500%. Finance Minister Muhammad Aurangzeb said that steps were being taken to bring non-filers into the tax net.
Business Recorder
13 hours ago
- Business
- Business Recorder
FBR proposes tax on online academies, recreational clubs
ISLAMABAD: The Federal Board of Revenue (FBR) has proposed to impose tax on the income of online academies and teachers, those using online marketplaces in e-commerce business, as well as to collect income tax from recreational clubs including Islamabad Club. The Senate Standing Committee on Finance and Revenue, chaired by Saleem Mandviwalla, held its sixth consecutive session on Wednesday, where 'Income Tax' provisions of the Finance Bill 2025-26 were discussed. The Committee was briefed on the tax reductions provided to salaried class under various slabs. The FBR chairman stated that the tax on the salaried class has been significantly reduced. The committee was informed that tax on salaried class coming under the tax slab (Rs600,000- 1200,000) annual income was reduced from five percent to 2.5 percent. He said that those with an annual income of Rs1.2 million will have to pay Rs12,500 in tax throughout the year, and the surcharge on income of more than Rs10 million has been reduced from 10 percent to nine percent. The committee recommended that the individuals earning monthly income of one lac should be exempted from the tax. The FBR officials, while giving a briefing, said that in the budget it has been decided to impose tax on the income of online academies and teachers. Teachers across the country are providing online digital education services. Tutor academies are earning Rs20 million to 30 million. A new clause 17C has been introduced in the Finance Bill 2025. Under the same measure, e-commerce businesses that operate via online marketplaces will also face new tax obligations, as authorities seek to broaden the tax base in the rapidly growing digital sector. The committee was further informed that it has been proposed to collect tax from entertainment clubs including Islamabad Club. In the Finance Bill 2025-26, income tax has been introduced on recreational clubs which were previously exempted from tax. State Minister for Finance and Revenue, Bilal Azhar Kayani, stated that the recreational clubs are liable to pay tax, where their income exceeds the expenditure, and such steps have been taken to broaden the tax net of the country. The Senate Standing Committee on Finance opposed the imposition of tax on the income of Islamabad Club and recommended tax exemption on annual income of Rs1.2 million, while the proposal of tax on small individuals doing online business was rejected. Discussing the newly introduced tax on e-commerce, the committee commented that the FBR should imposed tax on goods rather than services. Committee members recommended for removing Section 7E and equalise the tax rate for property seller and buyers. However, FBR told the committee that 7 E cannot be waived off as it has been agreed upon with the International Monetary Fund (IMF). The committee also expressed reservations over freezing bank accounts on notices by FBR. Federal Minister for Finance and Revenue also highlighted the newly introduced mortgage facility. He stated that mortgage will be available for houses up to 2,000 sq feet, and the individuals will also be eligible for tax credit not exceeding 30 per cent of total income. Commenting on the FBR's new move of disallowing 10 per cent in case of purchases from non-registered suppliers, the committee opined that such move will discourage competitive markets, as the number of registered suppliers is nominal across the country. The committee also expressed concerns over the newly-inserted clause, which restricts the 'Eligible Person' from making any purchase exceeding 130 per cent of wealth reflected in his/ her last year's statement. The committee recommended that such threshold should be exceeded to 400 per cent of previous year's statement. In attendance were Senators Syed Shibli Faraz, Mohsin Aziz, Fesal Vawda, Anusha Rahman Ahmad Khan, Muhammad Abdul Qadir, Ahmed Khan, Shahzaib Durrani, and Federal Minister for Finance and Revenue Muhammad Aurangzeb, State Minister for Finance and Revenue Bilal Azhar Kayani, FBR Chairman Rashid Mahmood Langrial and other senior officials of relevant departments. Copyright Business Recorder, 2025
Express Tribune
10-05-2025
- Business
- Express Tribune
Diamer-Basha dam now a top priority
The government on Friday decided to proceed with its plan to present a full fiscal year 2025-26 budget amid a suggestion to Prime Minister Shehbaz Sharif to unveil a short-term budget and also get provincial contributions to meet increased defense expenses. The participants of a budget preparation meeting on Friday also urged the government to allocate substantial funds for national defense and expedite the completion of the Diamer-Basha dam, citing India's move to hold the Indus Waters Treaty in abeyance. During the meeting, the prime minister also asked the Federal Board of Revenue to tax the income of Islamabad Club, which is the recreational venue for the country's bureaucrats, foreign diplomats and richest persons of society. The premier chaired the meeting of his cabinet ministers and top-ranking business leaders of the country to discuss the 2025-26 budget, to be unveiled in the first week of June. There was a suggestion in the meeting that due to the prevailing tensions with India, the government should provide maximum possible money for the defence and also consider the option of giving a shorter than one-year budget, according to multiple participants of the meeting. Prime Minister Shehbaz Sharif did not immediately share his mind on the proposal. The Constitution provides a room for giving a four-month budget. But a finance ministry official said that the government's plan to present the entire fiscal year 2025-26 budget remained intact. The Ministry of Finance has assured full provision of the resources to deal with the India-created conflict situation and has proposed at least 18% increase in the allocation for the next fiscal year over this year's spending. There was also a proposal in the meeting that the government should freeze next fiscal year's development budget at this year's actual spending, which may not cross Rs600 billion due to low spending so far. The sources said that some cabinet members also suggested giving maximum money for the completion of the Diamer-Basha dam so that the reservoir is completed at the earliest to store water. The participants urged to build sufficient foreign exchange reserves for meeting any unexpected import needs during the tension times. One of Pakistan's richest persons suggested the premier to reduce the bloated size of the government. The private sector participants also asked the PM to reduce taxes on textile exports and also suspend the Export Development Surcharge being collected from exporters. One of the participants urged the government to ban economic transactions by non-filers, including banning trading of grains by them. An official press statement underlined that the Prime Minister said that providing relief to the common man in the upcoming budget was the government's priority, and all-out resources will be utilized to reduce the financial difficulties of the poor and middle class. The prime minister directed that the upcoming budget should be prepared with a focus on sustainable export-driven growth and considering the projects to promote industries and increase production. The budget should also focus extensively on the creation of jobs, agriculture, information technology, small and medium enterprises, and the housing sector, said Sharif.
