In a significant move for Pakistan’s economic framework, the Finance Bill 2025-26 was approved clause by clause during a high-stakes National Assembly session chaired by Speaker Ayaz Sadiq.

The session marked a critical phase in the fiscal process, with Finance Minister Muhammad Aurangzeb presenting the bill and its related motions for passage.

Despite heated opposition, particularly from members like Alia Kamran and Mubeen Arif—who demanded the bill be delayed to seek public opinion—their amendments were rejected by majority vote. The minister tabled the bill in its final form as approved by the standing committee, and voting began on each clause.

A major highlight of the Finance Bill 2025-26 was the passage of amendments targeting sales tax fraud. According to the new law, actions such as issuing tax invoices without delivering goods, tampering with records, or destroying evidence will now be treated as criminal offences. Individuals involved in such fraudulent practices could face arrest—especially if the fraud amount is Rs. 50 million or more. However, those cooperating with investigations may avoid arrest.

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Additionally, the law requires a formal approval process for arrests. A committee consisting of the FBR's Member Operations and Member Legal must grant authorisation, and arrested individuals must be produced before a magistrate within 24 hours. Those attempting to flee the country or destroy evidence will be subject to immediate detention.

Another key development was the imposition of a Rs. 2.50 per litre carbon levy on petroleum products under Clause 3 of the bill. Although the opposition voiced strong objections, their proposed amendments were again defeated by a majority.

In a notable update to the Salaries and Allowances Act 1975, new clauses—4A and 4B—were introduced, shifting the authority to determine salaries and benefits of parliamentarians from the Secretariat to the House Committee. As a result, federal ministers and ministers of state will now draw salaries equal to those of other members of parliament. These amendments, supported by Finance Minister Aurangzeb, were moved by MNAs Nosheen Iftikhar and Zahra Wadood Fatemi and passed overwhelmingly.

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Amendments were also made to the Customs Act of 1969, aimed at cracking down on smuggling and illegal trade. The new provisions call for the installation of a cargo tracking system to monitor imports, exports, and the movement of goods within Pakistan. This system will be linked to a newly introduced e-bilty mechanism—a digital waybill requirement for transport vehicles.

Non-compliance with the e-bilty system will result in heavy penalties:

• Rs. 50,000 for a first offense
• Rs. 500,000 for a second offense
• Rs. 1 million and confiscation of goods for evasion or tampering
• Up to six months’ imprisonment for interfering with tracking devices

Additionally, Clause 225 introduces the Customs Command Fund, which will receive proceeds from the auction of seized smuggled goods. These funds will be used for anti-smuggling operations with approval from the Ministry of Finance and FBR. Clause 226 empowers the Customs Board to designate any check post as a Digital Enforcement Station, with authority to regulate staff operations and technology protocols via gazette notifications.

In a controversial move, the National Assembly also approved a 10% sales tax on solar panels, drawing mixed reactions from stakeholders concerned about renewable energy adoption.

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Meanwhile, Pakistan People's Party (PPP) Chairman Bilawal Bhutto Zardari voiced support for the bill, stating that several of his party’s proposals were accepted. He emphasized that:

• The Benazir Income Support Programme (BISP) funding has been increased by 20%, the largest yearly rise to date
• Individuals earning up to Rs 1.2 million annually will benefit from new tax reliefs
• The government has agreed to reduce taxes on solar panels by 50% compared to previous proposals
• Amendments related to limiting FBR’s excessive powers were also accepted

“We’re supporting this budget because the government has honoured our input,” Bilawal told the House. “It reflects public interest and provides real relief to ordinary citizens.”

The bill was earlier approved by the federal cabinet in a meeting chaired by Prime Minister Shehbaz Sharif, signalling full government backing for the reforms.