The Senate Standing Committee on Finance on Wednesday recommended exempting annual incomes up to Rs. 1.2 million from income tax, aiming to provide relief to low and middle-income earners.

Senator Shibli Faraz emphasized that individuals earning between Rs. 600,000 and Rs. 1.2 million annually should not be taxed. He highlighted that a person earning Rs. 100,000 per month effectively takes home only Rs. 42,000 after deductions, underscoring the need for tax relief.

The committee also deliberated on imposing taxes on the income of elite clubs. Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial stated that income generated by such clubs would be subject to taxation. However, he noted that these institutions primarily serve around 300 privileged individuals and do not benefit the general public.

Surprisingly, Committee Chairman Senator Saleem Mandviwala opposed the proposed tax on club incomes. In contrast, Minister of State for Finance Bilal Azhar Kayani defended the measure, clarifying that the tax would only apply if club income exceeds expenditures and that it targets the country’s privileged class.

Most committee members expressed support for taxing club incomes as part of broader efforts to enhance tax equity.