Islamabad, June 19, 2025 – The Senate Standing Committee on Finance has initiated a critical discussion over the controversial Finance Bill 2025-26, particularly the newly proposed restrictions on financial transactions by so-called “eligible persons.”
The core debate revolves around Section 114C of the Income Tax Ordinance, 2001 introduced through Finance Bill, 2025 which sets a limit on economic transactions that can be made relative to declared assets in filed tax returns.
The Federal Board of Revenue (FBR) has proposed capping such transactions at 130 percent of declared wealth. This would affect a wide range of economic activities, including property purchases, vehicle registrations, opening bank accounts, and investment in securities. However, members of the Senate, across party lines, have strongly urged the FBR to revise the threshold upward to 500 percent.
In a meeting chaired by Senator Saleem Mandviwalla, lawmakers argued that setting such a low limit would restrict legitimate business and property dealings. Senator Faisal Vawda warned that if buyers are forced to obtain NOCs before making any transaction, the real estate sector would collapse. Senator Mohsin Aziz of PTI echoed the sentiment, urging an increase in the threshold to 500 percent for a person to be deemed eligible for high-value transactions.
FBR Chairman Rashid Mehmood Langrial and Member Tax Policy Dr. Najeeb Ahmed defended the proposal, explaining that the rule aims to bring undocumented assets into the tax net. They even demonstrated a new mobile app allowing filers to revise their declared wealth and qualify for higher-value transactions.
Additional tax reforms were also reviewed. The Senate panel recommended a 1% tax on cash withdrawals and proposed bringing recreational clubs, as well as online coaching and tuition providers, under the tax net. The committee also endorsed a reduced tax rate—from 5% to 2.5%—on salaries between Rs0.6 million and Rs1.2 million.
Finance Minister Muhammad Aurangzeb assured senators that the government would consider revising the transaction eligibility threshold. Minister of State Bilal Azhar Kayani also confirmed that recreational clubs will now be taxed where income exceeds expenditure to help broaden the tax base.
The committee concluded by urging reforms that ensure compliance without stifling economic activity or burdening legitimate taxpayers.