ISLAMABAD: The Senate Standing Committee on Finance and Revenue, under the leadership of Senator Saleem Mandviwalla, convened its fourth consecutive meeting to scrutinize the Finance Bill, 2025, including the Annual Budget Statement. The session, held at the Parliament House, was attended by key figures such as Finance Minister Muhammad Aurangzeb and several senators, alongside officials from the Federal Board of Revenue (FBR) and other departments.

The committee’s deliberations focused on the Sales Tax Provisions, particularly the clauses addressing “Offences, Penalties, and Punishment on Tax Fraud.” Senator Farooq H. Naek introduced several proposals aimed at refining legal measures, including reducing penalties and sentences for tax fraud, mandating timely decisions on tax appeals by the High Court, and separating inquiry, investigation, and court trial phases. His suggestions received support from other committee members, emphasizing the need for proportionate and non-politicized penalties.

In an effort to enhance audit transparency, the committee approved a new clause for inspecting audit firms, empowering the Audit Oversight Board to monitor compliance with international standards. The decision followed concerns about audit firms’ limited audit activities. FBR’s plan to outsource certain audit functions, however, sparked debate over taxpayer confidentiality.

Senator Anusha Rehman highlighted the need for balanced regulation of e-commerce platforms, advocating for a threshold to register platforms based on business volume to avoid burdening individuals, particularly youth and women.

The committee also examined the tax exemption policies for FATA/PATA, set to phase out with a progressive GST increase. Senator Shibli Faraz raised questions about the tangible benefits of existing tax exemptions in these regions.

A significant disclosure emerged during discussions on the Public Finance Management Act, 2019, revealing that public sector entities have been investing billions without transferring funds to the central treasury. This practice leads to the government borrowing its own money from banks, incurring interest costs. The committee demanded detailed accounts and legal justifications for such practices.

Further, the committee approved the abolition of the Federal Excise Duty on the first purchase of immovable property under the Federal Excise Provisions of the Finance Bill, 2025.

The Senate Committee is set to reconvene, with the Finance Minister scheduled to address tax exemption policies and institutional financial practices, as the committee seeks clarity on these critical issues.