ISLAMABAD: The Federal Board of Revenue (FBR) has proposed to impose tax on the income of online academies and teachers, those using online marketplaces in e-commerce business, as well as to collect income tax from recreational clubs including Islamabad Club.
The Senate Standing Committee on Finance and Revenue, chaired by Saleem Mandviwalla, held its sixth consecutive session on Wednesday, where “Income Tax” provisions of the Finance Bill 2025-26 were discussed.
The Committee was briefed on the tax reductions provided to salaried class under various slabs.
The FBR chairman stated that the tax on the salaried class has been significantly reduced. The committee was informed that tax on salaried class coming under the tax slab (Rs600,000- 1200,000) annual income was reduced from five percent to 2.5 percent. He said that those with an annual income of Rs1.2 million will have to pay Rs12,500 in tax throughout the year, and the surcharge on income of more than Rs10 million has been reduced from 10 percent to nine percent.
The committee recommended that the individuals earning monthly income of one lac should be exempted from the tax.
The FBR officials, while giving a briefing, said that in the budget it has been decided to impose tax on the income of online academies and teachers. Teachers across the country are providing online digital education services. Tutor academies are earning Rs20 million to 30 million. A new clause 17C has been introduced in the Finance Bill 2025. Under the same measure, e-commerce businesses that operate via online marketplaces will also face new tax obligations, as authorities seek to broaden the tax base in the rapidly growing digital sector.
The committee was further informed that it has been proposed to collect tax from entertainment clubs including Islamabad Club. In the Finance Bill 2025-26, income tax has been introduced on recreational clubs which were previously exempted from tax.
State Minister for Finance and Revenue, Bilal Azhar Kayani, stated that the recreational clubs are liable to pay tax, where their income exceeds the expenditure, and such steps have been taken to broaden the tax net of the country.
The Senate Standing Committee on Finance opposed the imposition of tax on the income of Islamabad Club and recommended tax exemption on annual income of Rs1.2 million, while the proposal of tax on small individuals doing online business was rejected.
Discussing the newly introduced tax on e-commerce, the committee commented that the FBR should imposed tax on goods rather than services.
Committee members recommended for removing Section 7E and equalise the tax rate for property seller and buyers. However, FBR told the committee that 7 E cannot be waived off as it has been agreed upon with the International Monetary Fund (IMF). The committee also expressed reservations over freezing bank accounts on notices by FBR.
Federal Minister for Finance and Revenue also highlighted the newly introduced mortgage facility. He stated that mortgage will be available for houses up to 2,000 sq feet, and the individuals will also be eligible for tax credit not exceeding 30 per cent of total income.
Commenting on the FBR’s new move of disallowing 10 per cent in case of purchases from non-registered suppliers, the committee opined that such move will discourage competitive markets, as the number of registered suppliers is nominal across the country.
The committee also expressed concerns over the newly-inserted clause, which restricts the “Eligible Person” from making any purchase exceeding 130 per cent of wealth reflected in his/ her last year’s statement. The committee recommended that such threshold should be exceeded to 400 per cent of previous year’s statement.
In attendance were Senators Syed Shibli Faraz, Mohsin Aziz, Fesal Vawda, Anusha Rahman Ahmad Khan, Muhammad Abdul Qadir, Ahmed Khan, Shahzaib Durrani, and Federal Minister for Finance and Revenue Muhammad Aurangzeb, State Minister for Finance and Revenue Bilal Azhar Kayani, FBR Chairman Rashid Mahmood Langrial and other senior officials of relevant departments.
Copyright Business Recorder, 2025
