The Federal Board of Revenue (FBR) has proposed new taxes on the income of online academies, digital teachers, and e-commerce firms selling on online platforms. They also want to collect income tax from recreational clubs, including the Islamabad Club. The Senate Standing Committee on Finance and Revenue, led by Saleem Mandviwalla, met for the sixth time on Wednesday. They discussed the “Income Tax” rules in the Finance Bill 2025-26.
During the meeting, FBR officials explained that the government plans to tax the earnings of online academies and tutors. Many teachers across the country are offering digital education, with some tutoring centers earning between Rs 20 million and Rs 30 million. A new Clause 17C has been added to the Finance Bill 2025-26 to cover this. Along with this, e-commerce businesses on online marketplaces will face new tax rules. The government wants to expand the tax base in the growing digital sector.
The committee also reviewed tax relief options for salaried workers. The FBR chairman said tax rates have been cut for employees. Tax for those earning between Rs 600,000 and Rs 1.2 million a year has dropped from 5 percent to 2.5 percent. People earning Rs 1.2 million annually now pay Rs 12,500 in taxes each year. The surcharge on incomes over Rs 10 million went down from 10 percent to 9 percent.
The committee suggested that people earning Rs 100,000 each month should be tax-free.
It was also revealed that the Finance Bill 2025-26 proposes taxing recreational clubs, including the Islamabad Club, which are now exempt. State Minister for Finance Bilal Azhar Kayani said these clubs should pay taxes if their income exceeds their expenses. This move is part of efforts to increase the country’s tax base.
However, the Senate Committee rejected taxing the Islamabad Club’s income. They recommended tax breaks for those earning up to Rs 1.2 million each year. They also opposed taxing small online businesses. Instead, they suggested taxing goods, not services, in the e-commerce sector.
The Finance Minister also announced a new home loan scheme. People with houses up to 2,000 square feet will be eligible for a tax credit up to 30 percent of their income.
A new rule was also proposed to stop 10 percent of expenses on purchases from non-registered suppliers. The committee criticized this, saying it might hurt competition. They pointed out that there are a few registered suppliers in the country.
Another concern was a new rule limiting “Eligible Persons” from buying more than 130 percent of their declared wealth. The committee recommended raising this limit to 400 percent.
Senators Syed Shibli Faraz, Mohsin Aziz, Fesal Vawda, Anusha Rahman Ahmad Khan, Muhammad Abdul Qadir, and others attended the session. Senior officials, including the Finance Minister and FBR Chairman, also took part.
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