BUDGET 2026-27: Auto sector row rocks Senate body

ISLAMABAD: A parliamentary committee on Tuesday witnessed heated exchanges over alleged irregularities in the automobile sector, while recommending relief for exporters, tariff reforms and a review of electricity fixed charges.

The Senate Standing Committee on Finance and Revenue, chaired by Saleem Mandviwalla, continued its clause-by-clause review of the Finance Bill 2026.

Responding to Senator Faisal Vawda’s allegations, Special Assistant to PM on Industries Haroon Akhtar Khan appeared before the committee with Federal Minister for Science and Technology Khalid Magsi.

Mr Akhtar said members had the right to question the ministry but criticised “one-sided allegations”. Mr Vawda said his claims were based on official documents and he would apologise if proven wrong. He later shifted his claim, stating delays in commercial import of used vehicles caused a Rs125bn loss to the exchequer over eight months.

Panel seeks zero tax on stationery for educational purposes

The special assistant noted Mr Vawda had moved from “corruption” to “revenue loss”. Minister Khalid Magsi assured the committee of an investigation. The committee recommended withdrawal of the Engineering Development Board notification on quality compliance for used vehicle imports. The committee proposed abolishing sales tax on educational stationery, arguing it raises household education costs. Senator Mohsin Aziz called for reducing the rate to zero.

The committee also recommended bringing exporters under the Final Tax Regime (FTR) and further rationalising the tax structure to support export-led growth and foreign exchange earnings.

Javed Balwani of the Karachi Chamber of Commerce and Industry urged placing exporters under FTR at 1pc. Senator Mohsin Aziz supported it and questioned the delay. Senator Talha Mahmood opposed even 1pc advance tax, warning it would hurt exports. “If you want taxes instead of foreign exchange, impose 45pc and destroy the economy,” he said, demanding 0.5pc and vowing to oppose any higher rate.

Senator Abdul Qadir complained FBR was not releasing refunds, contested by Finance Minister Muhammad Aurangzeb who said payments were being made. Mr Talha criticised the process as a “muk muka programme”. Mr Balwani said the FASTER system had improved refund disbursement versus last year.

Meanwhile, the National Assembly Standing Committee on Finance and Revenue, chaired by MNA Naveed Qamar, called for fair taxation, proportionate enforcement and stronger safeguards for taxpayers.

It expressed concern over steep penalties, expanded enforcement powers and the continued reliance on advance and withholding taxes.

Published in Dawn, June 17th, 2026