ISLAMABAD: President Dr Arif Alvi on Saturday signed Finance (Supplementary) Bill 2021, generally known as the mini-budget, thus fulfilling one of the key conditions of the International Monetary Fund (IMF).
According to an official announcement, Dr Alvi has assented to the finance bill under Article 75 of the Constitution. Under the said article, the president is bound to give his assent to a money bill within 10 days.
The president’s assent is ceremonial, as Article 75(4) of the Constitution reads: “No act of Majlis-i-Shoora (Parliament), and no provision in any such act, shall be invalid by reason only that some recommendation, previous sanction or consent required by the Constitution was not given if that Act was assented to in accordance with the Constitution.”
The ruling Pakistan Thereek-e-Insaf (PTI) succeeded in getting the ‘mini-budget’ passed from the National Assembly, with the coalition and its allies comfortably defeating the combined opposition’s attempt to block it.
The finance bill was among those 16 pieces of legislation that the PTI-led coalition government bulldozed through the National Assembly on Thursday amid an opposition uproar in the presence of Prime Minister Imran Khan.
The approval of the finance bill 2021, seeking withdrawal of exemption on taxes and duties on several items with an impact of about Rs350bn, as well as the State Bank of Pakistan (Amendment) Bill 2021 is necessary to ensure that Pakistan’s sixth review of the $6 billion Extended Fund Facility gets cleared by the IMF’s executive board.
The IMF board meeting was earlier scheduled for Jan 12 to take a decision on the disbursement of about $1bn tranche, but it has now been rescheduled to the end of the month on Pakistan’s request.
The mini-budget
The new finance bill raises the rate of GST on 42 items from 1-10pc to 17pc, a change that is expected to raise an additional Rs30bn. These include locally manufactured cars, hybrid electric vehicles, import of re-meltable scrap, dairy items sold in branded packaging, branded cereals, silver and gold bars & jewellery and various types of plant machinery.
The government has retained exemption on the sale of baby formula for retail purchases of less than Rs500 per 200 grams. Similarly, the government has retained sales tax exemptions on red chillies and iodised salt.
