The Senate committee disapproves a tax on online enterprises.

The Senate Standing Committee on Finance examined the Finance Bill 2025 on Wednesday, endorsing a zero-rated tax on income up to Rs1.2 million and dismissing a proposal to tax persons engaged in small internet enterprises.

In a meeting led by Chairman Saleem Mandviwala, the committee sanctioned the proposal to tax the income of online academies and educators, while opposing the taxation of income from the Islamabad Club.

Officials from the Federal Board of Revenue (FBR) reported during the conference that educators were delivering online digital education services, generating earnings of Rs20-30 million. A new language has been incorporated into the Finance Bill to levy taxes on those engaged in e-commerce through online marketplaces.

According to FBR officials, all individuals offering services over the internet and electronic networks will be impacted. The tax will also encompass music, audio and video streaming platforms, cloud services, online software application providers, telemedicine, and e-learning services.

The tax will also apply to online banking services, architectural design services, research and consultancy reports, accounting services, and other internet offerings in the form of digital files, according to FBR officials. The committee dismissed a plan to impose taxes on persons operating modest online enterprises.

The FBR chairman stated that those with an annual income of 1.2 million will be required to pay Rs12,500 in taxes.

Committee member Senator Shibli Faraz stated that income ranging from Rs600,000 to Rs1.2 million should be exempt from taxation.

FBR Chairman Rashid Langrial informed the committee that a decision had been made to levy taxes on entertainment clubs, including the Islamabad Club. Nonetheless, the committee chair opposed the initiative.

Langrial asserted that the general populace did not derive any advantage from this club, as it catered exclusively to 300 individuals of affluence.

FBR officials indicated that a proposal exists to put limits on property and car acquisitions by non-filers. A cap of 130% of income has been established for property purchases by non-filers.

Senator Mohsin Aziz advocated for an increase in the 130% limit on property purchases by non-filers. The committee proposed raising the maximum to 500%.

Finance Minister Muhammad Aurangzeb stated that measures are being implemented to incorporate non-filers into the tax system.