ISLAMABAD – The Senate Standing Committee on Finance on Saturday submitted 204 recommendations to the National Assembly for inclusion in the Finance Bill 2025–26, including amendments to the proposed Public Sector Development Programme (PSDP).
Chaired by Senator Salim Mandviwala, the committee recommended maintaining tax-free status for annual incomes up to Rs 600,000 and urged the withdrawal of the proposed 18% GST on solar panels, citing its impact on middle- and low-income households facing high electricity costs. The House has adopted all 204 recommendations of Senate Standing Committee on Finance and forwarded to National Assembly for adoption.
Key fiscal proposals include a 10% tax on annual agricultural income exceeding Rs 5 million and the exemption of carbon levy and the Digital Service Surcharge (DSS) from the first 200 electricity units consumed. The committee also opposed the imposition of GST on essential items such as flour, pulses, and medicines.
It called for removing tax exemptions worth over Rs 5 trillion, which largely benefit the elite—corporations, large landowners, and real estate developers—while contributing little to the tax net.
Regarding Independent Power Producers (IPPs), the committee urged the government to reopen talks on capacity charges or consider deferring them, citing their strain on public finances.
In terms of relief measures, the committee proposed a 50% increase in public sector salaries (as opposed to the government’s proposed 10%), a raise in the minimum wage from Rs 37,000 to Rs 50,000, and a 20% pension increase for retired employees (instead of the proposed 7%). It also suggested doubling EOBI pensions to Rs 23,000 per month.
Other key recommendations included:
Cutting stamp duty to 0.5% for tax filers purchasing property under Rs 20 million, and 1% for non-filers.
A 50% reduction in indirect taxes (GST, customs duty, excise duty) and a shift towards direct taxation.
Broadening the tax base to include high-income landlords, developers, and brokers.
Removing taxes on school books and stationery.
Reducing sales tax on homeopathic medicines from 18% to 1%.
Reducing federal excise duty on fruit juices by 15%.
Raising transportation allowances for differently-abled workers from Rs 6,000 to Rs 10,000.
The committee emphasized aligning Pakistan’s tax-to-GDP ratio with India’s 18% by ensuring greater contribution from the affluent sectors currently under-taxed.
