The Senate on Thursday adopted several recommendations regarding the federal budget for FY2026-27, seeking an increase in the income tax exemption threshold for low-income earners, a reduction in electricity bills and increased taxes on luxury assets. A motion for this purpose was moved by Senate Standing Committee on Finance and Revenue Chairperson Saleem Mandviwalla.
The standing committee finalized the recommendations earlier in the day. The report was then laid before the Senate for adoption and would now be transmitted to the National Assembly (NA), as per the Constitution.
The NA will take up the recommendations before the final vote on the budget. The Senate’s recommendations include increase in the income tax exemption threshold for low-income earners, reduction in tax rates for salaried individuals affected by inflation, expansion of targeted social protection programmes for vulnerable households, reduction in general sales tax on essential food items, medicines, educational material and agricultural inputs, avoidance of imposition of new taxes on basic necessities that disproportionately affect lower-income groups, allocation of funds for reduction in electricity tariffs, the introduction of a transparent roadmap for reducing capacity payments and circular debt. The provision of targeted subsidies for low-consumption domestic consumers, the reduction in taxes and duties on fertilisers, seeds, pesticides and agricultural machinery, the increase in allocations for water conservation and agricultural research, increase in federal allocations for public hospitals and primary healthcare and enhanced funding for higher education, scholarships and vocational training programmes. The Senate has adopted the recommendations of the Senate Standing Committee on Finance and Revenue regarding the Finance Bill 2026.
Speaking on the occasion, Saleem Mandviwalla said the Finance Bill 2026 incorporates several positive reforms and the committee’s recommendations are intended to enhance their fairness, effectiveness and public acceptance. He said a total of one hundred and twenty-three recommendations have been prepared by the Senate for the National Assembly. Saleem Mandviwalla said the committee has recommended increasing salaries by at least 15 percent, broadening the tax base and avoiding the imposition of new taxes on essential commodities. He said the committee also proposed reducing taxes on fertilizers, seeds and agricultural machinery to support the farming sector.
Speaking in the Senate today, Adviser on Political Affairs Rana Sanaullah Khan says Pakistan has raised the issue of India’s weaponization of water at international forums.
He said India is constructing five dams on Chenab River and aims to complete them in the next four to five years. He said once completed, these projects would enable India to halt the flow of water of Chenab for a period ranging from sixty to ninety days. Rana Sanaullah said Pakistan could adopt a counterstrategy by constructing water reservoirs at three to four sites on River Chenab.
He explained that these reservoirs would allow Pakistan to store water when India releases excess flows and utilize the reserves during periods when the river’s flow is restricted.
Meanwhile, Senate completes its debate on Finance Bill 2026-27 as Finance Minister Muhammad Aurangzeb made concluding statement on the budget. He said that detailed discussion were held on finance bill in Senate sub committees. He said the meetings were also attended by the representatives of chambers and other trade bodies.
Talking about failure in achieving GDP growth targets, FM Aurangzeb said that regional conflict led to this situation. He said that in next fiancé bill, advance tax has been abolished from export sector.
He said various other markups have been reduced, no increase in taxes for the IT sector. FM Aurangzeb said steps were being taken to improve the ecosystem for freelancers as their training is being organized to improve their professional skills.
He said that loans were being made easier for small farmers in the agriculture sector as Rs. 10 billion has been allocated for the agriculture sector for the youth loan scheme. FM Aurangzeb said tax on import of agricultural machinery has been abolished. He said that the role of FBR is being digitalized by minimizing human intervention. He said that the fundamental changes are being made in the structure of FBR that will help the nation stand on its own feet.
Later Federal Board of Revenue Amendment Bill 2026 was presented in Senate by Federal Finance Minister Senator Muhammad Aurangzeb which was passed by majority vote. Meanwhile, Senate Opposition leader Raja Nasir Abbas who staged walk out from Senate session told media at parliament press gallery that Opposition has rejected this finance bill 2026-27. He said that interest-based budget can not be accepted. He said that the government and state has not given any relief to the masses in the budget. He also condemned PECA Act which is tantamount to gaging the voices of the people. He demanded legislation for the betterment of the people.