House Passes Finance Act 2025, Rejects Proposed Tax Amendments

The House of Representatives has endorsed the Finance Act 2025, granting legal backing to the tax provisions outlined in the upcoming fiscal year's budget.

During Saturday’s session, the Act was passed with a majority vote, while all proposed amendments to the tax provisions for FY 2025/26 were rejected.

Addressing the session, the Finance Minister stated that the Act focuses on broadening the tax base, curbing revenue leakages, and incorporating informal sectors into the tax system. He emphasized that investor interests were considered during tax rate revisions, aiming to maintain consistency in revenue policy.

The Act includes an increase in Pigouvian taxes on alcohol and tobacco products, citing their adverse health impacts. Additionally, a two percent luxury tax has been levied on gold and silver jewelry.

Although traders have raised concerns and launched protests over the revised taxes, the Finance Minister described such reactions as routine, noting that tax changes were made only where deemed essential.

Earlier, lawmakers had called for tax reforms that support domestic production. Key concerns included removing the green tax, enforcing pollution taxes effectively, eliminating luxury tax on jewelry, and adopting a more progressive taxation system.

Some members also criticized the effectiveness of revenue collection, citing mismanagement and questioning the government's commitment to social responsibility amid rising tax burdens on the general public.