In its fifth consecutive session on the Finance Bill 2025-26, the Senate Standing Committee on Finance and Revenue on Tuesday voiced strong opposition to several proposed tax measures, particularly the imposition of 18% General Sales Tax (GST) on solar panels and small vehicles.
The session, chaired by Senator Saleem Mandviwalla, brought together Federal Finance Minister Muhammad Aurangzeb, Minister of State for Finance Bilal Azhar Kayani, FBR Chairman Rashid Mahmood Langrial, and senior officials from affiliated departments.
The committee noted the rare and commendable joint presence of both finance ministers during deliberations, calling it a sign of growing transparency and responsiveness in the budgetary process. Senator Mandviwalla lauded the cross-party participation, terming it ‘a powerful and democratic exercise of budget scrutiny.’ He emphasized the importance of constructive input from all members to ensure the national budget reflects public interest.
One of the most debated issues was the proposed 18% GST on solar panel imports. The committee unanimously rejected the tax, calling it a sudden and discriminatory move that could hinder renewable energy adoption. Lawmakers also criticized the alleged ‘pre-budget dumping’ of solar equipment by certain stakeholders anticipating the tax hike.
The committee also took issue with the rise in GST on small vehicles-from 12% to 18%-particularly affecting 850cc cars. Chairman Mandviwalla deemed the tax on a Rs 3 million vehicle ‘unfair,’ while Senator Shibli Faraz echoed concerns, highlighting the disparity between tax policies for small car buyers and exemptions granted elsewhere. Lawmakers suggested moderating the rate to 14% or 15%.
In addition, the committee proposed a 7% pension increase for retired government employees and called for extending the duration of family pensions. It also recommended increased budgetary allocations for the Higher Education Commission (HEC).
The tax regime in FATA and PATA regions came under scrutiny, with members reviewing the full timeline of policy implementation. The committee also reviewed new conditions for iron scrap importers, who from the next fiscal year will be required to sell only to registered manufacturers-a move aimed at curbing tax fraud via ‘flying invoices.’
Recommendations put forward by Senator Farooq Hamid Naek on penalties for tax fraud were also discussed during the session.
Senator Mandviwalla concluded the session by praising the commitment of participating senators and reaffirming the committee’s dedication to a transparent, inclusive, and people-centered budget review. Notable senators present included Shibli Faraz, Anusha Rahman Ahmad Khan, Faisal Vawda, Muhammad Abdul Qadir, Mohsin Aziz, Kamran Murtaza, Munzoor Ahmad, Agha Shahzaib Durrani, Ahmed Khan, Zarqa Suharwardy Taimur, Waqar Mehdi, Jam Saifullah Khan, Irfan Ul Haq Siddique, and Khalida Ateeb, among others. The committee will resume discussions tomorrow (Wednesday) at 11:00 AM to review proposed amendments to the Customs Act.