Islamabad:The Senate Standing Committee on Finance and Revenue continued its detailed examination of the Finance Bill 2026-27 on Sunday, approving a series of major tax, digitalisation and revenue measures during an extended session chaired by Senator Saleem Mandviwala.
The meeting was attended by Finance Minister Muhammad Aurangzeb, Minister of State for Finance Bilal Azhar Kayani, Senator Sherry Rehman, Senator Talha Mahmood and senior officials of the Federal Board of Revenue and Finance Division.
The committee conducted clause-by-clause scrutiny of sales tax proposals, digitalisation reforms, petroleum-related amendments and revenue enhancement measures aimed at broadening the tax base and improving compliance.
A major decision approved by the committee allows the Federal Board of Revenue to conduct re-audits of business records in specified cases. Under the new framework, a Commissioner may order a re-audit where irregularities are suspected, subject to prior approval from the Chief Commissioner and after providing the taxpayer an opportunity to present their case.
The committee also approved provisions relating to revaluation of inventories held by registered persons. Revised stock valuation will be carried out by cost accountants, while inventory re-audits will be conducted by accountants selected from an approved FBR panel.
Members extensively debated FBR's proposal to establish a National Faceless Centre and implement a faceless audit and assessment system. Officials informed the committee that taxpayer cases would be assigned through automated algorithms, with audits and assessments conducted electronically to reduce direct interaction between taxpayers and tax officials.
FBR Member Ahmed Atiq Sarwar told the committee that the proposed system would separate audit and assessment functions and help minimize opportunities for corruption.
During the discussion, Sherry Rehman raised concerns regarding practical implementation challenges, particularly internet and connectivity issues, while Talha Mahmood questioned the shift from conventional enforcement methods.
Finance Minister Muhammad Aurangzeb said the government's objective was to reduce excessive human intervention while maintaining effective oversight and improving transparency.
Following detailed deliberations, the committee approved the establishment of the National Faceless Centre.
The committee further approved strict enforcement measures against businesses failing to integrate with the digital tax system. Repeated violations may result in additional penalties and even sealing of business premises.
Members also endorsed stringent action against fake tax invoices. Under the approved mechanism, individuals issuing fake invoices may face fines equivalent to the full invoice value, publication of their names and cancellation of tax credits obtained through fictitious invoices.
The committee approved amendments allowing e-auctions of seized goods and recommended that vehicles transporting seized goods should not automatically be confiscated.
During discussions on aviation-related tax concessions, the committee amended a proposal initially designed for Pakistan International Airlines and extended the exemption framework to all eligible airlines for the import and lease of aircraft, spare parts and operational equipment.
The committee also approved sales tax exemptions for the import of bulletproof vehicles required for the upcoming SCO Summit and counter-terrorism operations, subject to approvals from the Ministries of Foreign Affairs and Interior.
In another major decision, retail-packed products will be subject to a 12 percent tax rate. The measure is expected to affect a range of products including infant formula, edible oils, confectionery items, agricultural medicines, pesticides, branded footwear and clothing.
Officials said the objective of the reforms was to broaden the tax base, improve economic documentation and strengthen revenue collection.
The committee's proceedings were temporarily adjourned earlier in the day due to the absence of the Finance Minister and Minister of State. The session resumed after the arrival of Finance Minister Muhammad Aurangzeb.
The Senate Standing Committee on Finance and Revenue will continue its scrutiny of the Finance Bill 2026-27 and budgetary proposals at Parliament House on Monday.