FBR Pushes to Cancel Banks’ Special Tax Privileges in Budget

The Federal Board of Revenue (FBR) has recommended abolishing the Seventh Schedule of the Income Tax Ordinance 2001 to shift banks to the normal corporate tax regime. FBR Chairman Rashid Mahmood Langrial told the Senate Standing Committee on Finance that banks should not receive separate tax treatment and be treated like other companies under the normal tax regime. The committee, chaired by Senator Saleem Mandviwalla, reviewed and approved the proposed amendments during its discussion on the Finance Bill 2025-26. FBR Member Inland Revenue (Operations) Hamid Atiq Sarver briefed the committee on legal and technical changes to the tax treatment of banks. SECP Chairman Akif Saeed confirmed that banks are registered like other companies. However, FBR argued that the special banking tax schedule, introduced in 2007, should be removed. Meanwhile, Mandviwalla also criticised the performance of FBR’s anomaly committees and supported a proposal to abolish the Special Economic Zone (SEZ) Act, as the government is no longer offering new tax exemptions. He further backed the FBR’s proposal to limit taxpayer audits to three years.