Chairman Federal Board of Revenue (FBR) Rashid Mahmood Langrial has firmly stated that the government will not withdraw the newly introduced legislation that disallows 50% of business expenditure linked to cash sales exceeding Rs 200,000 per transaction.

Speaking before the Senate Standing Committee on Finance, Langrial clarified that the National Assembly’s Finance Committee has already approved the law and can only be revisited in the next Finance Bill for 2026-27.

“We have understanding that the law has also been cleared by the Senate Standing Committee on Finance. The legislators have approved the law and not the FBR”, Langrial clarified.

Senate committee members expressed shock upon learning that the Senate’s own Finance Committee had cleared the controversial measure.

Senator Mohsin Aziz criticized the move, calling it anti-business and warning of its damaging impact, saying, “You can ask any businessman about the negative implications of this law.”

In response, the FBR Chairman defended the policy, stating that Pakistan is transitioning toward a cashless economy. “If someone is conducting sales, it should not be in cash beyond a certain threshold,” he said.

Senator Sherry Rehman strongly opposed the legislation, calling it a “draconian” provision. She reiterated that the Pakistan Peoples Party (PPP) does not support the law.

The contentious provision, which took effect on July 1, 2025, was introduced under the Finance Act 2025.

It falls under Section 24 of the Income Tax Ordinance, 2001, and applies specifically to the category “Income from Business” as defined in Section 18.