ISLAMABAD: The Senate on Saturday proposed a comprehensive set of 204 recommendations, including several key proposals for the Public Sector Development Programme (PSDP) 2025-26, to the National Assembly for inclusion in the Finance Bill 2025.
The recommendations will now be forwarded to the National Assembly (NA), which will decide whether or not to incorporate them into the Money Bill.
Among the proposals, the Senate recommended that annual income up to Rs 600,000 should remain tax-free, while the proposed 18% GST on solar panels should be withdrawn.
The House also called for the regularisation of daily wage employees, creation of more jobs, and an immediate halt to the privatisation of national institutions.
The Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla, presented the detailed report to the House, which was adopted unanimously.
Senator Mandviwalla said that the committee had thoroughly reviewed proposals from stakeholders across sectors including agriculture, industry, and civil society. He said significant attention was paid to the needs of the working class and marginalized communities.
He said the committee urged the government to increase public sector salaries by 50% instead of the proposed 10%, and to raise the minimum wage from Rs 37,000 to Rs 50,000. It further recommended that pension increases for retired employees be raised from 7% to 20%, and that EOBI pensions be doubled from Rs 11,500 to Rs 23,000 per month.
He said tax exemptions for the elite including corporations, large landowners, and real estate developers should be abolished, and capital gains tax on real estate transactions should be reinstated. He also advocated for an emergency fund to address unexpected national expenses, and a 10% increase in development allocations for climate adaptation.
The committee proposed a 50% reduction in indirect taxes like GST, Customs Duty, and Excise Duty, shifting focus to direct taxation. It also recommended expanding the tax base to include high-earning landlords, real estate developers, and stock market brokers.
Mandviwalla highlighted concerns over the imposition of taxes on books and stationery items for school-going children, which the committee demanded be abolished. The House also supported a cut in Federal Excise Duty on the juice industry by 15%, and reducing sales tax on homeopathic medicines from 18% to 1%.
He emphasised the need for special transportation allowances for differently-abled workers and suggested raising the allowance from Rs 6,000 to Rs 10,000 per month.
He said all ad-hoc allowances of government employees should be merged into the basic pay, and that funding for higher education institutions under the Higher Education Division be restored to Rs 4,870 million. He also called for a boost in dam construction funds to ensure timely completion and proposed transferring PWD schemes to the Government of Sindh, as is done in other provinces.
He said locally manufactured imported tractors should be taxed at a reduced rate of 5% to assist small farmers, and import rules for used vehicles should be made more facilitative. The tariff reform exemption for the steel industry was also among the recommendations, along with the demand that construction contractors should not be treated as withholding agents.
The committee also proposed a 10% agricultural tax on income exceeding Rs 5 million per year, and stressed that circular debt surcharges should not be applied to electricity bills under 200 units.
Senator Mandviwalla concluded by saying that the recommendations also include the inclusion of Senators’ development schemes into the PSDP for the year 2025-26 and urged all political forces to come together for a Charter of Economy, similar to the Charter of Democracy, to ensure sustainable economic stability.
