A parliamentary committee has stopped a government proposal. It would have allowed the Federal Board of Revenue (FBR) to directly access taxpayers’ bank account details in scheduled banks. Lawmakers said such access could raise serious privacy risks and may lead to misuse of sensitive financial data.
Lawmakers Reject FBR Proposal to Access Bank Account Data
They stressed that tax authorities must follow proper legal channels instead of directly accessing private banking records. Tax officials told the committee that the information already exists with the State Bank of Pakistan (SBP). They said authorities would only check the data against income tax returns to improve monitoring. FBR officials added that they aimed to better track financial activity and improve tax compliance. They also shared that large amounts of money are held in the banking system, and stronger oversight was needed.
Officials informed the committee. Private bank accounts across the country currently hold around Rs37 trillion. These accounts total about 1.8 million. Officials said only around one million accounts are properly registered with the tax authority. Officials added that they already have access to the data of large companies. However, they want wider access. This is to improve oversight of financial transactions.
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Lawmakers strongly opposed the proposal. They warned that allowing direct access to bank account data could lead to misuse and weaken trust between citizens and institutions. Some members said they were not convinced by the explanation that data would only be used for tax checking. As a result, the committee formally rejected the proposal and blocked FBR from directly accessing account-holder information from banks. FBR bank account data rejection was the key outcome of this decision.
Rejection of Tougher Penalty Rules
The committee also rejected several proposed changes in the Finance Bill 2026 related to stricter penalties for taxpayers and non-filers under the Income Tax Ordinance 2001. Members argued that the proposed fines could unfairly affect people facing real problems such as illness or financial hardship. They asked FBR to redraft these amendments and make them more balanced and fair. FBR mobile phone tax Pakistan was also noted in the wider discussion of tax policy changes.
Apart from the reduction in income tax, the lawmakers deliberated on the provision of tax relief to salaried employees. According to some of the legislators, the government’s provision for relief to middle-class earners was inadequate since the salaried were highly taxed.
Despite rejecting some suggestions, the committee approved several others. It increased the surcharge on taxpayers who file returns after the deadline. It also imposed an excise duty on imported luxury cars. Cars with engine capacity between 2,000cc and 3,000cc will face a 40% duty. Cars above 3,000cc will face a 41% duty.
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Higher Penalties for Tax Violations
The committee approved higher fines for tax violations. The penalty for not submitting audit information increased from Rs25,000 to Rs100,000. A similar level of fine now applies to providing false information. For hiding taxable income or assets, the penalty has been set at Rs500,000. Officials said these penalties will apply only when authorities clearly prove concealment.
During the discussion, an FBR official described tax concealment as a very serious offence. The statement led to debate among lawmakers, who questioned the comparison and asked for clarification. The official later explained that tax evasion is considered a major economic crime and the responsibility of proving it lies with the tax authority in legal proceedings.
The committee approved higher surcharges for late tax filing. For companies, the surcharge increased from Rs25,000 to Rs100,000. Associations of persons now face a higher surcharge, raised from Rs10,000 to Rs50,000. Individual taxpayers also saw an increase, with the surcharge going up from Rs1,000 to Rs25,000.
Officials suggested that taxpayers who file returns on time should not automatically enter the Active Taxpayers List. This suggestion sparked further discussion.
Uniform Tax Rate for Services Sector
The committee approved a major change in service taxation. A standard tax rate of 7% will now apply to almost all services. This includes transport, courier, security, hotel, advertising, engineering, warehousing, telecom, oil field, tourism, and other related services. Pakistan service tax rate 2026 will apply across these sectors.
The same 7% tax rate will also apply to stock exchange services, data services, tower infrastructure services, and car rental services. However, IT and IT-enabled services will face a 4% tax. Professionals such as doctors, lawyers, architects, and accountants will face a 15% tax. Independent software developers will also come under the 15% tax rate.
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Towards the closing session, the committee finalized its recommendations on the Finance Bill 2026. It directed the secretariat to include all approved changes in the final report. The Senate Committee had finished their recommendations regarding the bill and submitted the same to the national assembly. Now, the ball was in the court of the National Assembly. News source eTimes Pakistan.
