Islamabad, June 20, 2025 – The Federal Board of Revenue (FBR) has taken a firm stance on overhauling the taxation framework for banks, recommending that the banking sector be treated like any other company for taxation purposes.
During a detailed session with the Senate Standing Committee on Finance and Revenue, FBR Chairman Rashid Mahmood Langrial strongly advocated for the abolition of the Seventh Schedule of the Income Tax Ordinance 2001 — a provision that currently offers special treatment to banks.
“The banks are commercial entities engaged in business, and there is no justification for applying separate tax laws on them,” the FBR chairman stated. He emphasized that banks should be taxed like any normal company, questioning why a distinct regime was in place for them. According to Langrial, the FBR has consistently opposed preferential treatment for banks, and it is time to bring parity in the tax regime by repealing the Seventh Schedule.
This special schedule, introduced in 2007, has long been criticized for creating an uneven playing field. Langrial argued that tax policy should be uniform and not dictated by sector-specific lobbying. “Tax laws must serve the national interest, and no sector, including banks, should be allowed to shape legislation to its advantage,” he said, reiterating the FBR’s commitment to a fair tax environment.
The matter was deliberated during a review of the Finance Bill 2025-26, chaired by Senator Saleem Mandviwalla. The FBR presented its detailed legal and operational arguments, supported by Member Inland Revenue (Operations) Hamid Atiq Sarver. The committee also invited Securities and Exchange Commission of Pakistan (SECP) Chairman Akif Saeed, who confirmed that banks are registered as regular companies under the Companies Act.
FBR officials further clarified the proposed amendments to the Income Tax Ordinance, stressing that banks should be part of the standard tax regime. The Senate panel later approved the recommended changes, signaling a possible end to the long-standing preferential tax setup for the banking sector.
This marks a significant policy shift by the FBR, aligning banks with broader corporate taxation principles and promoting transparency and equity in Pakistan’s fiscal structure.