Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial urged the Senate Standing Committee on Finance to abolish the Seventh Schedule (Banking Schedule) of the Income Tax Ordinance 2001, recommending that banks be treated under the same tax framework as other companies.
According to a news report, FBR chairman raised concerns over the special tax treatment given to banks, questioning why they were not subjected to the same tax laws as other registered companies.
“Banks are businesses, and their tax treatment should be aligned with that of other companies,” FBR chairman stated during his briefing before the Senate committee.
He further criticized the Banking Schedule, which was inserted into the Income Tax Ordinance in 2007, calling for its removal.
Langrial also addressed concerns about the anomaly committees formed by the FBR, stating that they were working within the limitations imposed by Pakistan’s commitments under the IMF program. Senator Mandviwalla criticised the committees for not addressing the concerns of the business community effectively, especially regarding issues in the tax law.
On the subject of audits, the committee discussed the FBR’s proposal to limit the audit of taxpayers to three years. Mandviwalla expressed concerns over the FBR’s repeated audits of taxpayers, pointing to a case where an Islamabad school had been audited for three years without any major issues.
The committee also considered the legal and technical amendments proposed by the FBR related to banking tax laws, with FBR officials providing detailed explanations to the panel. Following these discussions, the committee decided to defer some of the proposed amendments for further consideration in upcoming meetings.
The debate on tax reforms and the future of SEZs is expected to continue as the committee works towards finalizing changes to the Finance Bill.
