Finance ministry rules out additional salary tax relief

ISLAMABAD: The Finance Ministry on Friday categorically ruled out any additional relief for the salaried class through further tax cuts or salary increases, arguing that the proposed Rs52 billion relief package had already stretched the available fiscal space.

“We are not stopping here and can provide further relief in the next fiscal year,” Finance Minister Muhammad Aurangzeb said while briefing the National Assembly Standing Committee on Finance and Revenue. The committee urged the government to extend additional relief to the salaried class, which contributed around Rs625 billion to the national exchequer in taxes.

The Federal Board of Revenue (FBR) shared the estimated financial impact of the Finance Bill but requested that the details remain confidential due to the ongoing discussions with the International Monetary Fund (IMF).

The committee, which met with Naveed Qamar in the chair, approved the proposals to withdraw advance tax on foreign TV drama plays, while saying it was generating revenue.

The committee approved another budget proposal regarding imposing FED of Rs80 per litre of petroleum, top Naphtha and white spirit to discourage mixing of inferior petroleum products with expensive petrol and HSD, which is estimated to generate Rs23 billion and would be shared with provinces.

The committee also approved 7 percent of the gross amount payable in the cases of transport services, freight forwarding services, air cargo services, courier services, manpower outsourcing services, and hotel services.

Further provided that the rate of tax shall be 4 percent in case of IT services and IT-enabled services, and 15 percent in the case of independent professional services such as doctors, lawyers, architects, accountants, software engineers, or developers, working independently.

Regarding the gain arising on disposal of certain debt securities, the committee approved that the rate of tax to be deducted under section 151A shall be 20 percent of the gross amount of the capital gain, an increase from 15 percent.

The committee raised questions about non-filing in the non-filer category. FBR officials said that it was continued in light of the parliament recommendations. The committee endorsed the framing of a threshold for non-filers to enter the stock market.

A proposal to impose Special Excise Duty (SED) on the import of luxury vehicles came under discussion in the Committee. During the meeting, FBR officials informed the committee that a 40 percent Special Excise Duty would be levied on imported luxury vehicles with engine capacities ranging from 2,000cc to 3,000cc. The officials further stated that imported luxury vehicles with engine capacities exceeding 3,000cc would be subject to a 41 percent Special Excise Duty. The committee put on hold the recommendations regarding imported vehicles.

The Committee stressed that enforcement measures must remain fair, proportionate, transparent, and fully consistent with the principles of natural justice, while ensuring that deliberate tax evasion is effectively addressed through appropriate legal mechanisms.

Copyright Business Recorder, 2026