ISLAMABAD  -  The federal government on Wednesday informed a parliamentary committee that it would not introduce a mini budget to meet the annual tax collection target during the current fiscal year.

The Federal Board of Revenue (FBR) has said that it would take strict action against non-filers starting October. The Senate Standing Committee on Finance and Revenue convened yesterday under the chairmanship of Senator Saleem Mandviwalla at the Parliament House. The committee was informed that the FBR is struggling to achieve its annual tax collection target. From October 1, non-filers will face severe restrictions, including being barred from purchasing property and vehicles, international travel, opening current accounts, and investing in mutual funds. The committee received a briefing from the Governor of the State Bank of Pakistan (SBP) on the Islamic banking system. It was explained that Islamic banking is regulated by the Shariah Advisory Committee and the Shariah Compliance Department under the Shariah Governance Framework (SGF). After a thorough examination of the Islamic banking mechanisms, committee members concluded that further discussions are necessary to assess how Islamic banking is being regulated in accordance with Islamic principles. The chairman requested a comparative report on SBP regulations for Islamic and conventional banking. It was also noted that the mentioning of HIBA is missing from musharakh contract. The chairman expressed concern that banks are yielding higher returns through Islamic banking, suggesting that this might be a factor in its promotion. The committee urged the SBP to establish a mechanism that reflects the true essence of Islam as guided by Shariah.

The committee unanimously approved the government bill titled “The Banking Companies (Amendment) Bill, 2024,” with amendments proposed by the committee. Additionally, the private member’s bill titled “The State Bank of Pakistan (Amendment) Bill, 2024,” introduced by Senator Mohsin Aziz, was also passed by majority. While senator Anusha Rehman abstained from voting on the bill. It was noted that the banking sectors in smaller provinces, particularly Balochistan and Khyber Pakhtunkhwa are having very negligible lending practices which have led to persistent deprivation and slow industrialization in these provinces.

Furthermore, the Additional Finance Secretary addressed the amendments to sections 14B and 14C of the Members of Parliament (Salaries and Allowances) Act 1974 through the Finance Act, 2024, stating that it is the prerogative of Parliament to adopt these changes as deemed appropriate. The committee directed the ministry of finance to respond on the matter in three days. A briefing on the current status of EXIM Bank was deferred due to the president’s absence. The committee expressed serious concerns about longstanding issues related to EXIM Bank. Members also suggested the possibility of dissolving EXIM Bank, as it has not contributed to export growth, which was its original mandate. The committee summoned the CEO of EXIM Bank for the next meeting to explain his departure.

Additionally, a briefing on the need for the FBR to hire audit firms, including the procedures and criteria involved, was discussed. It was noted that the current capacity for auditing 6 million taxpayers is insufficient, necessitating the short-term hiring of ACCA and CA professionals to facilitate effective audits, with a requirement for 4,000 hires. The chairman remarked that the FBR had previously outsourced audit functions in 2005, however, reputable firms are being sought for individual. The committee emphasized the need for a completely transparent hiring process. Attendees included Senator Sherry Rehman, Mohsin Aziz, Anusha Rahman Ahmad Khan, Syed Shibli Faraz, and Senator Manzoor Ahmed, along with senior officials from relevant departments.