ISLAMABAD: The International Monetary Fund has rejected a proposal by the Federal Board of Revenue to allow a 25 percent tax rebate for teachers and researchers starting July 1, 2025.
FBR Chairman Rashid Mahmood Langrial told the National Assembly Standing Committee on Finance on Saturday that the fund turned down the request twice, citing the need for tax harmonisation. He said the government may provide support through the budget if possible.
MNA Nafeesa Shah said the government could consider giving teachers a special allowance instead. State Minister of Finance Bilal Azhar Kayani said there is no fiscal space available in the 2025–26 budget to offer such relief.
The committee approved the revised procedure for arresting individuals involved in tax fraud, as recommended by the Senate Standing Committee on Finance. The FBR chairman said the FBR has its own jails and can also use other jails if needed.
He explained that the government has introduced four safeguards to prevent misuse of arrest powers.
According to the new procedure, an arrest can take place if there is a risk of the accused escaping, but only with the approval of three board members, including FBR Member IR (Operations) and FBR Member Legal. The second condition is the possibility of tampering with evidence.
The third condition is tax fraud of Rs50 million or more. The fourth condition allows arrest if a person ignores three notices.
Langrial also said the clause related to income tax exemption for pensioners has been removed from the Income Tax Ordinance. Only pensions above Rs10 million will now be taxed.
The committee recommended raising the withholding tax on cash withdrawals by non-filers from 0.6 percent to 0.8 percent. However, it rejected a Senate proposal to increase the rate to 1 percent.
On salaried individuals, the FBR chairman said a 1 percent tax will apply to those with taxable income exceeding Rs600,000 but not more than Rs1,200,000.
