Finance Minister Shaukat Tarin on Thursday presented the Finance (Supplementary) Bill 2021 in the National Assembly (NA) amid uproar from the opposition.
It is pertinent to note that the bill was originally scheduled to be presented in parliament on Wednesday but the cabinet had rejected it’s approval.
In this regard, speaker Asad Qaisar stated that the bill will not be forwarded to the standing committee concerned, as there would be a debate on the bill in the NA, following which the House would vote on it.
It merits mention that the bill’s approval is necessary to ensure Pakistan’s sixth review of the $6 billion Extended Fund Facility gets cleared by the International Monetary Fund’s executive board on January 12, paving the way for the disbursement of about $1bn tranche.
The State Bank of Pakistan (SBP) Amendment Bill 2021 was also presented in the House, which was referred to the relevant standing committee for necessary vetting.
Main proposal of the finance bill
- 17pc uniform sales tax on mobile phones
- Increasing the federal excise duty on imported vehicles having the engine capacity of 1,000cc to 1,799cc from 5pc to 10pc, on 1,800cc to 3,000cc vehicles from 25pc to 30pc and on those higher than 3,000cc from 30pc to 40pc
- Increasing the tax on imported electric vehicles from five per cent to 17pc
- Increasing the advanced tax on up to 1,000cc vehicles from Rs50,000 to 100,000, on 1,000cc to 2,000cc vehicles from 100,000 to 200,000 and on those higher than 2,000cc from 200,000 to 400,000
- Raising the federal excise duty on locally made vehicles of engine capacity between 1,000 and 2,000cc from 2.5pc to 5pc and on those higher than 2,000cc from 5pc to 10pc
- Increasing the federal excise duty on locally made double cabin vehicles from 7.5pc to 10pc
- Raising the sales tax on imported oil seeds from 5pc to 17pc
- Increasing the general sales tax on 850cc to 1,000cc vehicles from 12.5pc to 17pc
- 17pc tax on products sold in sachets and branded chicken products
- 17pc general sales on flour mills
- Increasing the tax on packed dairy products from 10pc to 17pc
- Withdrawing tax exemption on sugarcane
- 17pc tax on import of animals, raw material for pharma products and agricultural seeds
- Increasing sales tax on batteries from 12pc to 17pc
PPP leader Raja Pervaiz Ashraf said in the last NA session, which was chaired by Deputy Speaker Qasim Suri, he had told the chair that there were reports of the government presenting a “mini-budget” in the assembly.
“I had said that it will make life more difficult for the people of Pakistan, but the chair had dismissed my concerns,” Ashraf said. “When, in fact, that was the time for the opposition to speak on the matter.”
He further complained that when the bill was presented today, even then the opposition was not being heard.
The PPP leader also said that in his response to Asif, Umar had not addressed any of the questions and issues raised by the PML-N leader.
“He (Umar) failed to satisfy this House,” Ashraf added.
He urged the speaker to reject today’s (Thursday’s) proceedings so that opposition and treasury members could present arguments on the matters taken up in the session anew.
Speaking on the occasion, PML-N leader Khawaja Asif said: “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 — another legislation needed to ensure the disbursement of $1bn tranche by the IMF.
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.
He said the whole nation was ashamed of what was happening in the parliament.
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 country’s sovereignty. I call that shameful.”
He also lambasted the opposition for criticising the government over national security.
“They invited [Indian Prime Minister Narendra] Modi to their house,” he said, making an apparent reference to PML-N supremo Nawaz Sharif.
Foreign Minister Shah Mehmood Qureshi said the opposition had the right to present its point of view, however, “the government’s job is to put forth facts before people”.
As Qureshi continued to speak, the opposition members pointed towards an incomplete quorum in the House. Responding to the opposition’s objection, the speaker adjourned the session till Dec 31.
According to details, the House also adopted multiple resolutions, extending the validity of several ordinances for a period of 120 days.
The ordinances that have been extended are the Federal Government Properties Management Authority Ordinance, 2021, Elections (Third Amendment) Ordinance, 2021, Public Properties (Removal of Encroachment) Ordinance, 2021, Pakistan Council of Research in Water Resources (Amendment) Ordinance, 2021, Pakistan Food Security Flow and Information Ordinance, 2021 and Tax Laws (Third Amendment) Ordinance, 2021.
Objecting to the extension of the Elections (Third Amendment) Ordinance, 2021, Asif said the move was unconstitutional as the ordinance had lapsed.
The speaker, however, disagreed and dismissed the objection.
Meanwhile, two women lawmakers got into a fight after which one ended up slapping the other amidsr the National Assembly ruckus.
The Opposition members were protesting around the speaker’s dice when PPP’s MNA Shagufta Jumani slapped PTI lawmaker Ghazala Saifi, creating chaos in the National Assembly.
The Opposition staged a protest and held placards to oppose the mini-budget and chanted slogans calling it a “black day”.
Ghazala Saifi said that her finger has been fractured, adding that her hand was twisted during the fight.
She further said that she got her hand checked upon which the doctor has confirmed that one of her fingers have suffered a fracture.
The lawmaker stated that she will take further action, adding that she slapped Shagufta in return as she “had no other option.”
It is pertinent to note that no statement has been issued by MNA Shagufta Jumani, so far.
Earlier today, PM Imran Khan played down the chances of PML-N leader and rival Nawaz Sharif returning to the country, saying: “We also used to hear in the past about [Nawaz Sharif’s] return when he was in Saudi Arabia, but he only returned after a deal”.
The premier was dismissive of the opposition’s claim that the government was in danger, saying “they make such statements every three months.”
When asked about a statement of the opposition leader in the National Assembly, Imran taunted that Shehbaz Sharif’s speeches were more a “job application” than anything else.
Following the NA session, Tarin while addressing a presser defended the Finance (Supplementary) Bill 2021, saying that tax exemptions worth Rs2 billion would be reviewed under it.
“Whereas our sales tax amounts to around Rs3 trillion. How will [an addition of] Rs2 billion make a significant difference in inflation?” he questioned.
He went on to say that tax exemptions would mostly be withdrawn on imported items.
“A common man usually doesn’t use these items. How will it burden the poor then?” he asked.
“We haven’t done anything to burden the poor,” he added.
On the SBP Amendment Bill 2021, the finance minister said it was aimed at strengthening the central bank.
“And strengthening institutions is in the PTI’s manifesto,” he added.
Tarin said under the bill, the SBP would be given administrative independence, which would give it the authority to decide matters such as the salaries of the bank’s employees.
Moreover, he said, members for the SBP board, which would have the authority of the central bank, would be nominated and approved by the government.
“The president will approve them,” he said, adding that the board would also be answerable to relevant standing committees of parliament.
So the notion that the government was selling out the country’s sovereignty was wrong, he added.
He went on to add that criticism regarding the government imposing additional burden on the people and of a consequent rise in inflation is “baseless”
Tarin further said that tax revision worth Rs343 billion has been revised in the bill.
He went on to state that a Rs70 billion rebate included taxes on luxury and business items including imported fish, high-end bakery items, expensive cheese and imported bicycles.
Tax exemptions worth Rs2 billion will be removed from items of general use like personal computers, sewing machines, matchboxes, iodised salt, red chillies, and contraceptives.
“If we expect inflation to increase because of the imposition of tax on these items then they [the Opposition] are mistaken,” he said, adding that this is the “crux of the supplementary finance bill.”
“The Opposition has been spreading rumours regarding an increase in inflation because of the finance bill,” the finance minister said.
Tarin said that no sales tax will be imposed on fertiliser, imported second-hand clothes and cinema equipment.
“The agreement with the IMF is not just a matter of $1 billion,” Tarin said.
He further stated that “the Board of Governors (BoG) of SBP will be appointed on the recommendations of the government,” he said, adding that it was earlier thought the BoG will be appointed by the bank itself.
Tarin clarified, however, that it was made clear to them that this wouldn’t be possible. “How can they make their own appointments?” he remarked.
“No amendment has been made in the bill regarding the appointment of SBP’s board of directors,” he added.
Tarin underlined that central banks of all developed countries have autonomy.
Shedding light on the conditions of the IMF, Tarin said that the Fund wants them to impose sales tax “on all items”.
He, however, reiterated the government’s revision will only mean an imposition of taxes worth Rs2 billion.
“We are increasing taxes on luxury cars,” he said, adding that the Fund has not imposed any conditions regarding increasing taxes on vehicles.
Speaking about inflation, he said that the Pakistan’s inflation based on consumer price index (CPI) clocked in at 11.5% in November 2021.
“Inflation in the US and UK also surged to record highs, so if I have failed have Joe Biden and Boris Johnson also failed?” he asked.
The minister also asked that if prices of edible oil in the international market are increasing he should stop importing the essential commodity, or if the price of coal is rising the government should stop importing that as well.
Tarin concluded by assuring the media that prices of medicines will go down.