BUDGET 2026-27 : NA panel rejects FBR bid to access bank account data

• Lawmakers fear access to such data could be misused
• Body okays proposed tax rates for salaried class, calls for more relief
• Finance minister says no room for more concessions this year
• Panel rejects stricter penalties for filers, non-filers in certain cases
• Luxury vehicles above 3,000cc to face 41pc levy
• IT, related services to remain taxed at 4pc; professionals, independent software developers to face 15pc rate

ISLAMABAD: A parliamentary committee on Fri­day questioned the government’s claim of providing relief to the middle-income sal­aried class, while rejecting a proposal to grant tax authorities access to taxpayers’ bank account data and opposing stricter penalties for taxpayers in certain cases.

The National Assembly Standing Committee on Finance and Revenue, chaired by MNA Naveed Qamar, approved higher surcharges for late filing of tax returns as well as the imposition of a special excise duty on imported luxury vehicles.

Following extensive deliberations, the committee finalised its recommendations on the matters considered during the meeting and directed the secretariat to incorporate the approved recommendations into the committee’s report on the Finance Bill, 2026, for presentation before the National Assembly. The Senate committee has already finalised its recommendations and transmitted them to the National Assembly.

The committee approved proposals to impose a special excise duty on imported luxury vehicles. It supported the proposal that cars with engine capacity between 2,000cc and 3,000cc would attract a 40pc excise duty, while vehicles above 3,000cc would face a 41pc levy.

Salaried class

The committee approved the proposed tax rates for salaried individuals amid calls for greater relief for the middle-income group.

PPP lawmaker Sharmila Faruqui said the 11pc tax on monthly salaries between Rs100,000 and Rs200,000 was excessive. “This is the middle class, and the rate should be reduced,” she said, while welcoming the government’s overall move to provide relief to salaried taxpayers.

She pointed out that Rs600bn had been collected from salaried taxpayers this year, while the relief amounted to only Rs50bn. Ms Faruqui termed the relief “insufficient” and urged greater concessions for the Shahida Akhtar Ali stressed that the middle class was directly affected by the current tax burden, noting that most complaints received were from salaried individuals.

Mr Aurangzeb said the reduction in super tax would also benefit salaried taxpayers, adding that public feedback had been “positive”.

MNA Javed Hanif also criticised the relief measures, saying the middle class had been given “very nominal” relief. He suggested that super tax should be increased to offset concessions for salaried individuals.

PPP MNA Hina Rabbani Khar defended the government’s economic direction but questioned whether imposing 18pc sales tax on food items was appropriate in a country like Pakistan.

FBR access to bank accounts

The committee took up the government’s proposal to access taxpayers’ account data in scheduled banks. Committee members voiced strong reservations, warning of potential misuse.

“I can say with certainty this data will be misused,” remarked PPP lawmaker Sharmila Faruqi.

FBR member Hamid Atiq Sarwar told the committee that the data already resided with the State Bank of Pakistan and would only be examined against income tax returns. He added that the move would allow the tax authority to monitor bank transactions.

MNA Javed Hanif countered that the matter had already been settled with the State Bank and insisted that the FBR could not directly obtain account-holder data from scheduled banks.

Director General Tax Policy Office Dr Najib Memon explained that details would only be sought if a large sum entered an account.

Despite FBR’s assurance that the amendment would be routed through the State Bank, the committee rejected the proposal and barred the tax authority from acquiring account-holder data directly.

FBR officials informed the committee that Rs37tr was currently held in 1.8m accounts, of which only one million were registered with the FBR. It was further pointed out that while transaction details of large companies were already available, the FBR wanted direct access to scheduled banks to expand oversight.

The committee also rejected FBR proposals in the Finance Bill, 2026, to tighten penalties for filers and non-filers under the Income Tax Ordinance, 2001, and directed the FBR to redraft the amendments.

Members argued that taxpayers facing illness or any other genuine excuse would be unfairly penalised. “Imposing fines in such circumstances is unjust,” lawmakers observed.

Fines and surcharges

The committee approved proposals to increase fines for taxpayers failing to comply with audit requirements or concealing taxable assets. It agreed to raise the penalty for not undergoing audit from Rs25,000 to Rs100,000, and for providing false information from Rs25,000 to Rs100,000.

The fine for hiding taxable assets was increased from Rs100,000 to Rs500,000.

FBR officials clarified that penalties would apply only where concealment was proven, with fines set at either Rs500,000 or 100pc of the tax shortfall.

“Concealing taxable income is a crime harsher than murder,” remarked Director General Tax Policy Office Dr Najeeb Ahmad Memon, prompting laughter from committee members.

“How can this be harsher than murder?” asked lawmaker Javed Hanif Khan.

Dr Najeeb explained that “literature describes it as a crime against the nation”. He added that it was the FBR’s responsibility to prove concealment, both administratively and in courts. The committee ultimately approved the proposal to impose a Rs500,000 penalty for hiding taxable income or assets.

It also endorsed proposals to impose heavier surcharges on taxpayers filing returns late or making false claims. The committee approved penalties on individuals claiming excess tax credits, requiring them to pay fines equal to the wrongly claimed amount.

Tax officials also proposed that taxpayers submitting returns on time should not automatically be included in the Active Taxpayers List.

The surcharge for companies filing returns late was raised from Rs25,000 to Rs100,000. For associations of persons, the surcharge was increased from Rs10,000 to Rs50,000, while for individual taxpayers it was raised from Rs1,000 to Rs25,000.

Uniform rate on goods, services

The committee approved FBR proposals to revise and unify tax rates on goods and services, raising the levy on most sectors to 7pc.

Tax officials briefed the committee that payments for goods or services would now attract 7pc tax, up from 6pc.

“Previously, some sectors were taxed at lower rates while others faced higher rates. We are now standardising the regime,” an FBR official explained.

Transport, courier, security, hotel, advertising, engineering, warehousing, telecommunications, oil-field and travel services will all be taxed at 7pc. The same rate will apply to services provided by the stock exchange, mercantile exchange, data services, tower infrastructure and car rentals. IT and IT-enabled services will continue to be taxed at 4pc, while professionals such as doctors, lawyers, architects and accountants will face a 15pc rate. Independent software engineers and developers will also be taxed at 15pc.

The committee approved the FBR’s proposal to implement the revised tax structure.

Published in Dawn, June 20th, 2026 ...