FBR chief rules out withdrawal of law disallowing 50pc cash sales expenses

ISLAMABAD: Chairman Federal Board of Revenue (FBR) Rashid Mahmood Langrial categorically stated that the government will not withdraw the new legislation, disallowing 50% of expenditure attributable to cash sales exceeding Rs 200,000 per transaction.

FBR Chairman informed the Senate Standing Committee on Finance that the law has been approved by the National Assembly Standing Committee on Finance and could only be changed in the next Finance Bill (2026-27). “We have understanding that the law has also been cleared by the Senate Standing Committee on Finance. The legislators have approved the law and not the FBR”, Langrial clarified.

Senate committee members were surprised to hear that the Senate Finance Committee has cleared the said law. Senator Mohsin Aziz pointed out that it is a anti-business law and you can ask any businessman about the negative implications of this law.

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FBR Chairman responded that we are moving towards cashless economy. If a person is engaged in sales, it should not be done in cash beyond a certain limit.

Senator Sherry Rehman stated that the PPP is against this law which is a draconian law. This new provision introduced through Finance Act 2025 has been implemented from July 1, 2025. The disallowance introduced via Section 24 of the Income Tax Ordinance, 2001 pertains exclusively to the head “Income from Business”, as defined under Section 18.

Copyright Business Recorder, 2025