‘Financial needs’: govt committed to increasing tax on bank profits, Senate body told

The Senate Standing Committee on Finance and Revenue was told on Wednesday that the government was committed to increasing the tax on bank profits to support its financial needs, according to a statement from the Senate Secretariat.

Finance Minister Muhammad Aurangzeb said this in the committee meeting chaired by Senator Saleem Mandviwalla at the Parliament House.

The committee discussed critical financial and trade issues, including tax reforms, money bills, and challenges faced by the customs department in managing border trade, according to the statement.

During the meeting, Federal Bureau of Revenue (FBR) Chairman Rashid Mahmood Langrial noted “banks had received an additional Rs70 billion in taxes this year due to their failure to maintain the advance-to-deposit ratio limit by December 31”.

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Senator Shibli Faraz pointed out that Rs440 billion had been returned to banks in January 2025.

“We are committed to increasing the tax on bank profits to support the government’s financial needs,” the finance minister remarked, according to Senate statement.

“Banks must play their part in helping the government,” Aurangzeb was quoted as saying.

Border trade

The finance minister also responded on the issue of truck congestion at the Iran-Pakistan border, stating that 600 trucks were currently stuck, causing major delays and unemployment in Balochistan.

“Thousands of people have become unemployed due to these blockages,” Senator Manzoor Kakar said in the meeting, urging the government to resolve the issue promptly.

Regarding trade between Pakistan and Iran, the committee examined the complexities of barter trade, which began in 2023.

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Customs officials pointed out that only Iranian-made products were allowed under the barter agreement, but traders had been importing luxury goods in Iran and then exporting them to Pakistan, according to the statement.

“The SRO (Statutory Regulatory Order) governing the trade is difficult to navigate, and needs to be made more pragmatic,” Anusha Rehman said, highlighting the urgent need for reform.

Trade representatives also voiced concerns over customs procedures.

“Forty trucks full of exports used to go to Iran every day. Now, due to bureaucratic hurdles, trade is severely hindered,” one trader told the committee.

Mandviwala maintained that the SRO should be simplified and called for clearer procedures to facilitate smoother trade flows.

Money bills

Meanwhile, Mandviwalla highlighted the debate over bills labeled as money bills.

“The government informed us that the speaker has declared it a money bill, but when I spoke to the National Assembly speaker, he denied labeling anything as such,” he was quoted as saying in the statement.

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The committee also discussed the powers of the Senate in handling money bills, with Mandviwala emphasising that while the Senate might consider such bills, it did not have the authority to vote on them.

“According to the law, if there is a disagreement in the Senate regarding a bill’s status as a money bill, the Speaker of the National Assembly will make the final decision,” Mandviwala explained.

Senator Shibli Faraz supported the view, suggesting that the opinion of the Law ministry should be sought to clarify the matter.