The Senate Standing Committee on Finance has rejected a proposal to impose a tax on online commerce while approving a tax on profits earned by major private clubs, including the exclusive Islamabad Club.The decisions were taken during a key budget discussion in the committee chaired by Senator Saleem Mandviwalla, held in Islamabad on Wednesday. Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial briefed the committee about the taxes proposed in the next budget, 2025-26. 

During the meeting, the FBR chairman stated that elite institutions like Islamabad Club were “built for the luxury of only 3,000 individuals” and are holding billions of rupees in their accounts. “We are proposing a tax on the profits of such clubs,” he said. He further revealed that in the upcoming 2025–26 budget, income up to Rs600,000 per annum will be exempt from tax, while income between Rs600,000 and Rs1.2 million will be taxed at 2.5%. 

The chairman added, “Paying Rs1,000 monthly tax on a salary of Rs100,000 is not a back-breaking burden.” However, Senator Mohsin Aziz suggested that the annual tax exemption limit should be raised to Rs1.2 million, while Opposition Leader Senator Shibli Faraz argued that the purchasing power has eroded significantly, saying, “What was worth Rs50,000 is now effectively worth Rs42,000.” 

On June 15, the FBR introduced a new cargo tracking system as part of the 2025–26 budget reforms. The system includes the “E-Bilty” electronic consignment system, which has now been formally integrated into Pakistan’s Sales Tax law, ensuring real-time monitoring of goods in transit. Additionally, a 2% sales tax has been imposed on e-commerce transactions, and courier companies have been made responsible for tax collection at source under enhanced oversight rules. 

Furthermore, e-commerce platforms are now required to deduct taxes on digital sales and submit monthly transaction data to the FBR in a broader attempt to expand the tax base and ensure transparency in Pakistan’s rapidly growing digital economy.

Credit: Independent News Pakistan (INP)