The Senate Standing Committee on Finance and Revenue, under the chairmanship of Senator Saleem Mandviwala, met at Parliament House to consider and finalise its recommendations on the Finance Bill 2026-27, containing the Annual Budget Statement laid before the House on 12 June under Article 73 of the Constitution.
The preliminary session of the Committee commenced with a clause-by-clause examination of the Customs Act, 1969, during which recommendations and observations of Committee members were sought on the proposed amendments. The Committee continued deliberations throughout the day on various provisions of the Finance Bill 2026-27, including customs and sales tax measures.
The meeting was attended by Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb, Minister of State for Finance Bilal Azhar Kayani, Senator Sherry Rehman, Senator Abdul Qadir, Senator Syed Faisal Ali Sabzwari, Senator Shahzaib Durrani, while Senator Anusha Rehman Ahmad Khan participated virtually.
During discussions on the budgetary proposals, Chairman Committee Senator Saleem Mandviwala observed that new experiments were conducted every year through the federal budget. He noted that many changes introduced over the past ten years were subsequently withdrawn and questioned the rationale of pursuing measures that did not produce accurate results.
Officials of the Federal Board of Revenue informed the Committee that the Prime Minister had established a Tax Policy Office to separate tax policy formulation from tax administration.
Senator Abdul Qadir expressed concern that the super tax was discouraging investment in Pakistan. Senator Sherry Rehman observed that provincial tax collection performance was improving and, in some areas, showing better results than the FBR. She further stated that it remained uncertain whether the FBR would be able to achieve its annual tax collection targets.
The Committee also reviewed a proposal seeking authority for the FBR to impose fines for violations of customs laws. Senator Anusha Rehman opposed the proposal, stating that such authority belonged to the government and should not be delegated to the FBR board. She informed the Committee that the authority had instead been placed with the Federal Finance Minister.
The Committee considered an FBR proposal to outsource the auction process of seized goods to third parties. Officials maintained that the private sector should conduct auction activities instead of customs officers. Following deliberations, the Committee approved the proposal.
A significant discussion took place on customs clearance procedures. Member proposed that a fixed customs clearance period for imports should be determined. The proposal received support from Chairman Committee Senator Saleem Mandviwala and other Committee members.
Senator Saleem Mandviwala stated that a clearly defined timeline should be prescribed for customs clearance and decisions on imported consignments. He observed that importers often suffered due to delays in customs processing and stressed that officers responsible for unnecessary delays should also be held accountable. The Chairman subsequently directed the Ministry of Law and Justice to incorporate an appropriate timeline in the relevant legal provisions.
Later, Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb joined the proceedings and participated in discussions on fiscal reforms and economic policy.
The Finance Minister stated that investors required predictability and consistency in government policies. He emphasized that all stakeholders must work together to move the economy forward and announced that economic consultations would continue throughout the year rather than ending on June 30.
The Committee subsequently took up proposed amendments to the Sales Tax Act, 1990, and examined several new taxation measures.
FBR officials briefed the Committee on the proposed implementation of an Advance Receipt Invoice system. Questioning the proposal, Senator Saleem Mandviwala asked why an advance receipt invoice was necessary when tax deductions were already being made under existing mechanisms.
Officials informed the Committee that a new method for issuing and recording sales tax invoices was being introduced. They further explained that a legal definition of the National Faceless Center was being incorporated into the Sales Tax Act and that a Production Monitoring System was being introduced to monitor production and sales activities more effectively.
Bilal Azhar Kayani said the implementation of electronic invoicing would significantly strengthen monitoring of business transactions. He informed the Committee that the business community had welcomed the initiative and viewed it as an incentive-based scheme. He explained that businesses opting out of the scheme would remain under the normal tax regime, while those refusing to join either framework would face penalties. He added that the new structure differentiated between large and small retailers.
Finance Minister Muhammad Aurangzeb informed the Committee that the government had initiated measures aimed at transitioning the economy from stability towards sustainable growth. He stated that Parliament had approved the separation of tax policy formulation from tax collection functions and described the establishment of the Tax Policy Office as a major structural reform.
The Finance Minister further informed the Committee that the Tax Policy Office would maintain continuous engagement and consultations with traders and business representatives throughout the year to ensure greater policy consistency, stakeholder participation and economic confidence.
The Committee will continue its clause-by-clause scrutiny tomorrow at 2:00 pm of the Finance Bill 2026-27 and formulate recommendations for submission before the Senate.