The Senate Standing Committee on Finance and Revenue has approved a budget proposal to abolish the Capital Value Tax (CVT) on foreign movable and immovable assets owned by resident Pakistanis, paving the way for tax relief for individuals holding assets abroad.
At present, resident Pakistanis are required to pay CVT on foreign assets. The proposal to eliminate the tax was approved during the committee’s review of the Finance Bill 2026-27.
However, the committee opposed a proposal to significantly increase token tax on motor vehicles in the Islamabad Capital Territory. Members directed the Islamabad administration to present a comparative tax chart covering Islamabad and the provinces during Monday’s meeting before any decision is taken.
The committee also raised concerns over the potential impact of reductions in import duties, additional customs duties, and regulatory duties on domestic industries and local manufacturers. In response, Secretary Commerce informed the committee that the government’s tariff rationalization plan provides domestic industries with 15 percent tariff protection.
The Senate panel continued its detailed examination of the Finance Bill 2026-27 during an extended session at Parliament House chaired by Senator Saleem Mandviwala. The meeting was attended by Finance Minister Muhammad Aurangzeb, Minister of State for Finance Bilal Azhar Kayani, senators, senior Federal Board of Revenue officials, and representatives from relevant departments.
During the review, the committee approved a framework allowing the Federal Board of Revenue to conduct re audits of business records in cases where irregularities are suspected. Under the proposal, a commissioner may order a re audit with prior approval from the chief commissioner, while taxpayers will be given an opportunity to present their case before any final decision is made.
The committee also approved provisions allowing the revaluation of inventories held by registered taxpayers. Inventory valuations will be determined by cost accountants, while re audits will be conducted by accountants selected from an approved FBR panel. Commissioners will also be empowered to seek specific responses from taxpayers during proceedings.
Members further approved a series of enforcement measures aimed at integrating businesses into the digital tax system and curbing fake invoicing. Businesses that fail to integrate with the digital system within the prescribed timeframe may face penalties, while repeated violations could result in additional fines and the sealing of business premises.
The committee also approved strict penalties against fake tax invoices. Individuals issuing fake invoices may face fines equal to the full value of the invoice, while tax credits obtained through fictitious invoices will be cancelled. Additional penalties include a 20 percent charge on discrepancies between input and output tax, along with surcharges and other penalties for incorrect tax claims. The committee also approved amendments related to the disposal of seized goods and recommended that vehicles transporting seized goods should not be automatically confiscated.
