• The panels of the National Assembly of the Senate oppose carbon collection, an undue burden for the public
• Approve new taxes on high value pensions, athletes
• The Government asked to reveal terms of the IMF resilience installation
Islamabad: The parliamentary committees rejected on Thursday the government’s proposal to impose a carbon tax on oil derived products, qualifying an undue charge for the public, while the Minister of Finance emphasized that “the era of fiscal exemptions and amnesty schemes is over.”
However, they approved new taxes on high -value pensions and the income of international athletes.
The carbon tax became a focal point since the permanent committees of the National Senate and National Assembly on finance and income
Chaired by Senator Salem Mandviwalla and Mna Naveed Qamar, respectively, both panels proposed several amendments and scored several measures. The Senate concluded its deliberations on the tax provisions proposed on Thursday.
The debate revolved around whether the measure must be classified as a tax or tax, its income potential and its provincial participation, and if its purpose is genuinely another tool for the federal government to collect additional funds.
Senator Sherry Rehman firmly distinguished between fiscal instruments, stating that there is a significant difference between a carbon tax and a carbon tax. Carbon leaflets are not standard practices, he said, adding that it is carbon taxes that are generally imposed.
She argued that such a measure cannot be submitted through the Finance Bill, asking instead of the dedicated legislation.
Senator Shibli Faraz criticized the movement as contradictory. “On the one hand, the government highlights climate change; on the other, it introduces a tax. This is not a carbon tax, it is more as extortion,” he said.
Senator Mohsin Aziz cited the ruling of the Supreme Court in the Zafar Iqbal Jhagra case, stating that “under that decision, a carbon tax cannot be imposed. To do so can constitute contempt of the court.” He also raised concerns about the smuggling of fuel without control of Iran.
Sherry Rehman emphasized that carbon taxes generally apply to specific industries with specific environmental objectives, not collected directly on the general population. “You are carrying common men and women while labels with climatic finances,” he said.
“The position of our party is clear. Such tax cannot be implemented through the Finance Bill,” said Rehman. Senator Faisal Vawda also opposed the carbon tax, describing it from an undue load for the general public.
MNA Syed Naveed Qamar also sought clarity on the projected income of the proposed carbon tax. In response, officials of the Ministry of Finance said that the measure is expected to generate RS45 billion in fiscal year 2025-26.
Qamar also questioned how much of that amount would be accumulated for the federal government if the tax is redefined as a tax. The Minister of State for Finance, Bilal Azhar Kayani, clarified: “If it becomes a carbon tax, the federal government would receive RS18 billion.”
To this, the Minister of Finance, Muhammad Aurengzeb, asked: “Where did this carbon tax proposal come from?” The president of the Federal Income Board (FBR), Rashid Mahmood Langial, replied: “The issue previously arose in the Senate’s Permanent Finance Committee.”
MNA DR MIRZA IKHTIAR BAIG offered a key clarification: “If it remains a tax, the entire amount will go to the federal government. But it becomes a tax, then the provinces will also be entitled to an action.”
Senator Mandiwalla requested details about the specific use of these funds, while Senator Sherry Rehman demanded that “the government reveal the complete terms of the resilience and sustainability agreement of the IMF (RSF).”
Surcharge lid elimination
Meanwhile, the Senate Parliamentary Committee rejected the elimination of the surcharge limit for the plea that would increase costs for energy consumers. The Committee also rejected the staggered encumbrances proposed on small vehicles.
However, the Committee approved the proposals to impose taxes on annual pensions higher than RS10 million, withdraw income tax exemptions for international athletes and extend fiscal holidays for economic and special technological areas.
The National Assembly Committee also deliberated on the government’s proposal to impose a 10 percent sales tax on solar products. Mr. Qamar said the government agreed to reduce the sales rate of sales of 18PC proposed to 10 percent in solar panels.
The president of FBR said that the Parliament must make the final decision; Once you do, the tax authority will implement the required amendment.
MNA MUBEEN ARIF commented that if the Senate has recommended a 10 percent rate, the National Assembly Committee should boost additional reduction. Qamar clarified that the recommendation did not come from the Senate, but originated in the NA committee.
Fraud related provisions were postponed for greater deliberation, and the Finance Law draft was carried out for reconsideration at the next meeting.
The Committee recommended reviewing the export financing scheme for raw cotton and suggested aligning taxes on local cotton production with imported cotton.
New adoption of energy vehicles
The members also discussed the new Law on the Adoption of Energy Vehicles, 2025, and pointed out the lack of a comprehensive plan for the transition to electric vehicles, citing the shortage of load stations.
It was also observed that hybrid vehicles have not been included in the proposed measures. Given these concerns, the Committee decided to defer the consideration of the matter until the next meeting, with instructions to the Ministry to present a comprehensive and processable plan for the implementation of the objectives described in the proposed finance bill.
The Committee also considered the amendments proposed to the Seal Law. During the detailed deliberations, it was observed that the non -filler term is being used in the proposed amendment, although this category has been eliminated from applicable laws. In the light of this inconsistency, the Committee decided to differ the consideration of the amendment until the next meeting.
Fiscal amnesty scheme
The Minister of Finance, Aurengzeb, said there will be no more tax exemptions or tax amnesty schemes. He said that the era of fiscal exemptions and amnesty schemes is over. “Now we are focused on expanding the fiscal network, and that process is actively underway,” he added.
The debate of the Committee stressed deep concerns about fiscal compliance, since the FBR proposed strict application measures, prohibits unregistered persons of operational bank accounts and disconnecting public services for level 1 retail retail, while recognizing systemic gaps, with only 35,000 of 300,000 industrial units recorded for sales taxes.
The legislators weighs punitive amendments to section 14AC against the practical risk of overreach. While MNA Javed Hanif supported the toughest position, others such as Sharmila Faruqi urged a change towards incentives instead of sanctions.
The opposition leader, Omar Ayub, questioned how many connections had been really cut for non -filtering, warning that excessive powers for fiscal officers could be counterproductive.
The FBR chief recognized the evasion tactics and emphasized the need for improved powers, while ensuring that deterrence such as the freezing of the bank account would be temporary.
Posted in Dawn, June 20, 2025
