The very same parliamentary panel has just set its foot down on any overreach on taxation authority, while at the same time endorsing stiffer penalties and luxury car taxes. This is all that transpired within the Budget 2026-27 hearing.
ISLAMABAD: The key result of the discussions held on Friday was the one strong decision. NA committee opposes the FBR proposal to directly access the data of the scheduled accounts of taxpayers, as such a move would make way for abuse, as cautioned by the legislators.
This proposal was taken up by the National Assembly Standing Committee on Finance and Revenue headed by MNA Naveed Qamar. NA panel rejects FBR bank account access at various stages of the debate, maintaining that it would lead to its abuse irrespective of whatever security measures were proposed by the FBR along with it.
The Rationale behind FBR’s Need for Access
It must be noted here that FBR did not make this demand out of thin air. According to the FBR member, Hamid Atiq Sarwar, the information was already available at the State Bank of Pakistan, and the need to access it would merely facilitate checking of the same against the income tax records maintained by the FBR.
According to Director General Tax Policy Office Dr Najib Memon, another explanation was provided by the FBR, where he said that the FBR would only ask for account details when money in large amounts enters the account.
Reasons for Rejection by the Committee
In spite of the assurance by the FBR, including even that the proposed amendment will have to pass through the State Bank, the decision by the NA committee that FBR cannot access the bank accounts still stands. Javed Hanif, member NA, opposed this proposal, saying that the issue was already sorted out with the State Bank and no way can the FBR get hold of the account details.
In the end, the committee refused to allow the tax agency access to such personal information of account holders – a move that underscores real bipartisan concern regarding the extension of the FBR’s influence into the personal financial affairs of citizens.
Tax Rates for Salaried Class Approved, But Seen as Inadequate
In addition to rejecting the FBR access to bank accounts headline by the NA committee, the NA committee has also addressed the issue of taxation of the salaried class. The NA committee has approved the proposed tax rates for salaried individuals, despite calls for more relief from several lawmakers.
A PPP parliamentarian, Sharmila Faruqui, claimed that the 11 percent tax rate charged on monthly incomes ranging from Rs100,000 to Rs200,000 was too high as these figures denote the middle class and hence the tax rate needs to be lowered. The most significant disparity in the figures she pointed out was that of Rs600 billion in tax revenue earned from salaried individuals whereas the tax relief was Rs50 billion.
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Redrafting of Penalties for Non-Filers
In the light of the same philosophy, NA panel rejects FBR bank account access, the committee also rejected the FBR’s proposals regarding stricter penalties on filers and non-filers of the Income Tax Ordinance, 2001. Instead of accepting the proposed amendments, the committee instructed the FBR to redraft them.
Reasoning based on the concept of fairness was employed in this case. It was suggested that there will be an unfair treatment of the taxpayers who fall ill or have some valid reason to delay their payments according to the new model. In other words, the legislators claimed that it will be unfair to fine such individuals. The choice reflects the stance of the committee as a whole throughout the discussion.
But not all the suggested penalties were rejected. There was an approval to significantly increase penalties for those who do not comply with the audit procedure or those who conceal their taxable assets. Consequently, the penalty in respect of non-audit has been enhanced from Rs25,000 to Rs100,000, and so has been the penalty in case of false declaration which now stands enhanced to Rs100,000 from Rs25,000 earlier.
With regard to concealment of taxable assets, further enhancement in penalties has been done; fine in this case would be enhanced from Rs100,000 to either Rs500,000 or 100% of shortage of tax. The FBR authorities have stated that in cases where there is proof of concealment, the penalty would be imposed.
In addition, the committee agreed with higher surcharges being imposed on those individuals who file their returns late or make any false claims. The lawmakers have decided that individuals who receive too many tax credits will be subject to a penalty, equal to the amount incorrectly claimed by them.
Increased Penalties in Case of Concealment
Late filing charges increased by leaps and bounds for all categories of taxpayers. For companies that file their returns late, the surcharge has been increased from Rs25,000 to Rs100,000. Furthermore, the surcharge on association of persons has been increased from Rs10,000 to Rs50,000 and that on individuals has been raised from Rs1,000
Aside from the tax administration reforms, the committee also passed a provision for imposition of excise tax on luxury cars brought into the country. Those imported automobiles whose engines range from 2,000 cc to 3,000 cc will pay taxes of 40 percent, whereas those automobiles whose engines exceed 3,000 cc will pay taxes of 41 percent.
Having adopted the recommendations, the secretariat has been instructed to integrate them in the report of the committee on the Finance Bill, 2026, prior to submitting the report for consideration by the National Assembly. The recommendations of the Senate committee have already been submitted to the National Assembly.
“The rejection of the FBR’s decision regarding bank accounts in the National Assembly” is certainly one of the most important decisions that took place in this session; this is because it demonstrates that as the tax collection department tightens its grip on enforcing the laws by increasing the penalties, parliament is not in favor of giving the tax authorities any more powers.”
Nayab Fatima is a university graduate and an emerging media professional with a strong passion for journalism, research, and independent reporting. She specializes in developing well-researched, fact-based, and analytical news stories covering a wide range of sectors, with particular expertise in technology, telecommunications, aviation, and the automobile industry.
