National Assembly approves federal budget for FY 2025-26

The National Assembly on Thursday approved the federal budget for the fiscal year 2025-26, with certain amendments to the Finance Bill, despite strong protests from the opposition, reported 24NewsHDTV Channel. 

Earlier, National Assembly began the clause-by-clause approval of the federal budget for the fiscal year 2025-26, rejected all amendments proposed by the Opposition with a major vote, reported 24NewsHD TV channel.

Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb presented the Finance Bill with a load of amendments in the House for final approval. The session was chaired by Speaker Ayaz Sadiq and attended by Prime Minister Shehbaz Sharif, who also went to Opposition and shook hands with Gohar Ali Khan and Asad Qaiser.

During the proceedings, all opposition amendments related to the carbon levy were rejected, while the government’s proposed amendments were accepted. 

According to the finance bill 2025, sales tax rate on solar panels has been reduced to 10pc. One of the key approvals was the acceptance of amendments related to the Customs Act, with 201 members voting in favour. On the other hand, the opposition’s amendments were dismissed by a majority vote.

Throughout the session, members continued to propose amendments while Finance Minister Aurangzeb responded to these proposals, expressing the government’s support or opposition as needed.

The amended Finance Bill (2025-26) has revised penalty regime for committing tax fraud and non-filing of monthly statements by intermediaries or courier companies collecting payments from online marketplaces.

The amended Finance Bill (2025-26) has proposed many amendments in the Sales Tax Act relating to the penalty regime.
According to new amendments in the Finance Bill, any tampering with tax invoice will be treated as tax fraud under Finance Bill 2025. The provision of wrong information in tax returns will be considered as tax fraud.

Removal of evidence to avoid paying taxes will also be considered tax fraud. Any person who provides wrong information wilfully will be considered as tax fraud.

As per the bill, three notices will be issued to the relevant company involved in tax evasion. The investigation against the person will be open. 

A person who will join the investigation will not be arrested, but in case he or she tries to travel abroad will be arrested.

The Bill further stated that a person who commits tax fraud worth Rs500 million will be arrested.

Permission of a committee comprising Member Operations, Member Legal is mandatory for arresting anyone. The arrested person will be produced before a magistrate within 24 hours of his or her arrest.

According to Finance Bill 2025-26, arrest in sales tax fraud will be after the confirmation of forgery and tampering with the tax amount. Issuing tax invoice without supplying goods will also lead to arrests under tax fraud. Tampering in sales tax will also be included in the category of sales tax fraud.

 According to Finance Bill 2025, two new sections included in customs act. A Customs Command Fund will be established vide Section 225 of Customs Act. The revenue generated through auction of smuggle goods will be transferred to the Customs Command Fund. 

The amount will be utilized for anti-smuggling activities after obtaining approval from FBR and the Federal Ministry of Finance. According to Finance Bill 2025, the Customs Command Board will make decisions about the spending of funds and its rules and regulations. 

As per Section 226 of the Customs Act, the Customs Board will declare any customs check post into Digital Enforcement Station. The Customs Board will issue a gazette notification in this regard. The Board, through notification, will decide its rules and regulations. 

According to Finance Bill 2025-26, withholding tax on property purchase has been reduced by 1.5pc for the new fiscal year. 

From July 1 2025, withholding tax on property purchase worth Rs 50 million will be reduced to 1.5pc from 3pc. 

However, withholding tax on property sales worth more than Rs 50 million and up to Rs 100 million will be decreased to 3.5pc from 5pc. Moreover, according to the Finance Bill, withholding tax on sale of property worth more than Rs 100 million will be reduced to 4pc from 5.5pc after July 1. 

In the Finance Bill 2025-26, key amendments have been made in income tax, sales tax, and customs laws, while 107 entities have been granted income tax exemption. 

107 institutions including Fauji Foundation, Army Welfare Trust, Shaukat Khanum, Edhi Foundation, Al-Shifa Trust, Forman Christian College, LUMS and Ghulam Ishaq Khan University have been declared exempt from income tax. 

The Poverty Alleviation Fund, National Rural Support Program, FBR Foundation and Pakistan Agricultural Research Council have also been given tax exemption. Similarly, pensions of former presidents and their widows and Diamer-Bhasha and Mohmand Dam funds have also been exempted from income tax. 

Finance Bill 2025-26 allows for the establishment of cargo tracking, e-billing systems, and digital enforcement stations to prevent smuggling. A new income tax system has been introduced for the salaried class. 

There will be tax exemption on annual income of Rs 600,000, 1pc on Rs 6 to 1.2 million, Rs 6,000 fixed and 11pc tax on Rs 1.2 to 2.2 million, Rs 116,000 fixed and 23pc on Rs 2.2 to 3.2 million, Rs 346,000 fixed and 30pc on Rs3.2 to 4.1 million, while Rs 616,000 fixed and 35pc tax will be imposed on income above Rs 4.1 million. 

A 5pc tax has been imposed on pensions exceeding Rs10 million annually. The Finance Bill has fixed the sales tax rate on solar panels at 10pc, while an electronic system will be introduced for complete monitoring of imported goods, transit, and delivery. 

Reporter Usman Khan