NA panel seeks fiscal impact details of budget tax relief measures

ISLAMABAD, Jun 15 (APP): The National Assembly Standing Committee on Finance and Revenue on Monday directed the Ministry of Finance and the Federal Board of Revenue (FBR) to submit detailed revenue estimates, fiscal impact assessments and implementation plans of the proposed tax relief measures under the Finance Bill 2026 before its further consideration, expressing concerns over their potential impact on revenue collection.

Chairing a meeting of the committee at Parliament House, Chairman Syed Naveed Qamar sought clarity on whether the anticipated revenue losses arising from the proposed concessions had been adequately quantified and asked the government to explain its strategy for offsetting any resulting fiscal shortfall.

The committee received a comprehensive briefing from the Minister of State for Finance and senior FBR officials on the proposed tax measures, fiscal reforms and revenue initiatives outlined in the Federal Budget 2026-27.

Members discussed relief measures for salaried individuals amid persistent inflation and rising living costs, and sought clarification on whether the revised tax slabs would provide meaningful relief to middle-income earners. Concerns were also raised regarding reductions in property-related taxes, incentives for the information technology sector and the effectiveness of such measures in encouraging investment, export growth and long-term economic sustainability.

While appreciating efforts to modernize tax administration, members expressed reservations about safeguards for taxpayer rights, transparency, due process and data privacy under the proposed faceless audit and artificial intelligence-based assessment framework.

The chairman stressed that tax relief measures should remain equitable and economically justified, while underscoring the need to broaden the tax base and improve compliance.

The committee was informed that the budget package comprised 11 relief measures, 10 rationalization measures and five administrative reforms aimed at promoting economic growth, encouraging investment, improving documentation of the economy, enhancing tax compliance and strengthening revenue collection.

Officials highlighted key relief measures, including a reduction in exporters’ minimum tax from two percent to 1.25 percent, continuation of the Final Tax Regime for IT exporters, revised tax slabs and abolition of surcharge for salaried individuals, lower withholding taxes on property transactions, rationalization of Federal Excise Duty on international air travel and reduced super tax rates for certain categories of corporate taxpayers.

The committee was further informed that the relief package proposed the abolition of taxes on contraceptives and selected women-related products, withdrawal of Capital Value Tax on foreign assets, sales tax exemption for the shipping industry and incentives for modernization and upgrading of brownfield refineries.

According to officials, these measures are intended to stimulate investment, promote exports, support economic activity and ease the tax burden on key sectors of the economy.

The briefing also covered rationalization measures, including expansion of the Third Schedule, introduction of a fixed tax regime for small retailers, revision of tax treatment of coupon-washing transactions, elimination of tax arbitrage between industrial and commercial importers, enhanced penalties for non-compliance, rationalization of withholding taxes on services, imposition of duties on luxury vehicles and measures to curb fuel adulteration through an adjustable Federal Excise Duty on solvents and related products.

The committee was also apprised of administrative reforms, including the establishment of a National Faceless Audit Wing and National Assessment Wing, greater use of third-party data, algorithm-based dispute resolution, digital invoicing systems and a Central Data Hub supported by artificial intelligence for risk assessment and compliance monitoring.

The committee also approved the minutes of its previous meeting held on June 13, 2026.

The meeting was attended by MNAs Rana Iradat Sharif Khan, Zeb Jaffar, Dr. Nafisa Shah, Hina Rabbani Khar, Dr. Sharmila Faruqui, Dr. Mirza Ikhtiar Baig, Muhammad Javed Hanif Khan and Shahida Begum, besides senior officials from the Ministry of Finance and Revenue and the Federal Board of Revenue.