ISLAMABAD: The PTI-led federal government on Thursday tabled Finance (Supplementary) Bill 2021, or the mini-budget as the opposition calls it, in the National Assembly (NA amid ruckus from the latter’s benches.
Minister for Finance and Revenue Shaukat Tarin presented the government’s supplementary finance bill for final approval, as a pre-requisite to resume the $6 billion External Fund Facility (EFF) of the International Monetary Fund (IMF).
The opposition staged a vehement protest and chanted slogans to prevent Shaukat Tarin from introducing the Finance Bill 2021 and SBP Amendment Bill in the House. The lower house of parliament, being chaired by National Assembly Speaker Asad Qaiser, adopted various resolutions extending various ordinances for a period of 120 days.
Speaker Asad Qaisar said the bill will not be forwarded to the standing committee concerned. An intense protest against the bills escalated into fisticuffs between opposition lawmaker Shagufta Jamani and PTI MNA Ghazala Saifi.
‘Don’t sell Pakistan’
Speaking on the NA floor, PML-N leader Khawaja Asif said that the sovereignty of Pakistan was being sold. “The government had violated the Constitution by presenting an ordinance that had already lapsed and expired,” he added.
“You’re giving SBP’s control to IMF. Please have mercy on the people of Pakistan. Don’t sell Pakistan. You allowed people to loot the country for three years,” he said, making a reference to the State Bank of Pakistan (SBP) Amendment Bill 2021.
He urged the House to not let Pakistan surrender its sovereignty. “Surrendering Pakistan’s economic sovereignty is more dangerous than that of the surrender in 1971,” he said while referring to the East Pakistan debacle.
Govt’s response
Adviser to the Prime Minister on Parliamentary Affairs Dr Babar Awan responded that the assembly proceedings were being carried out under the prescribed rules and procedures.
The speaker also ruled that the resolution for extension in the election amendment ordinance was legitimate.
In response to Asif’s speech, Planning and Development Minister Asad Umar said the opposition had been trying to “scare the nation” by making a hue and cry over the SBP amendment bill.
“The difference between them and us is that when they work to curb dengue, they have to advertise about it themselves. But when we work to curb Covid-19,” international forums praise the Pakistan Tehreek-i-Insaf-led government, Umar added.
Reacting to Asif’s remarks about surrendering the sovereignty of Pakistan, he said: “A Pakistani leader is speaking about surrendering the countries sovereignty. I call that shameful.” He also lambasted the opposition for criticising the government over national security.
Supplementary bill
The supplementary finance bill is a pre-requisite to resume the $6 billion External Fund Facility (EFF) of the International Monetary Fund (IMF).
According to the finance ministry’s proposal, the government will tax approximately 150 goods at a rate of 17%. Therefore, goods that were currently either completely exempt from General Sales Tax (GST) or being taxed at 5% to 12% would now be taxed at 17%.
The income tax rate on mobile phone calls is expected to increase from 10% to 15%. Meanwhile, the GST rate on cars above 850cc will go up to 17% and the tax on the import of electric vehicles in CBU conditions will increase from 5% to 17%.
Business-to-business transactions will go up from 16.9% to 17%. Zero-rating available on supplies of raw materials for imported milk would be withdrawn and be taxed at 17%.
Supplies to duty-free shops will be taxed at 17%. As they will be taxed for the first time, there are no revenue estimates. The finance bill also proposes that bread prepared in bakeries, restaurants, food chains and shops be taxed at a 17% rate.
The bill increases the tax collection target from Rs5,829 billion to Rs6,100 billion for the remaining financial year. The government has also reduced the budget for development programmes by Rs200 billion.
The “mini-budget” was one of the conditions of the IMF which was to be met before January 12, 2022, in order to recover more than $1 billion in instalments from the Fund.
