Finance Minister Shaukat Tarin on Thursday presented the Finance (Supplementary) Bill 2021 — or the mini-budget as the opposition calls it — in the National Assembly (NA) amid uproar from the opposition benches.
The bill was originally scheduled to be presented in parliament on Wednesday but the cabinet had deferred its approval due to desiring a “threadbare discussion” on it.
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.
Speaker Asad Qaisar said the bill will not be forwarded to the standing committee concerned. He said there would be a debate on the bill in the NA, following which the House would vote on it.
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.
Finance bill’s main proposals
17pc uniform sales tax on mobile phones
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 Rs100,000, on 1,000cc to 2,000cc vehicles from Rs100,000 to Rs200,000 and on those higher than 2,000cc from Rs200,000 to Rs400,000
Increasing the general sales tax on 850cc to 1,000cc vehicles from 12.5pc to 17pc
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
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
17pc tax on products sold in sachets and branded chicken products
17pc tax on import of animals, raw material for pharma products and agricultural seeds
Increasing sales tax on batteries from 12pc to 17pc
17pc general sales on flour mills
Increasing the tax on packed dairy products from 10pc to 17pc
Withdrawal of tax exemption on sugarcane
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.
When it was his turn to speak, 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.
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.
Earlier in the day, a meeting of the parliamentary groups of parties included in the ruling alliance led by the PTI on the issue of the bill’s passage was also held.
The House also adopted multiple resolutions, extending the validity of several ordinances for a period of 120 days.
According to state-run Radio Pakistan, 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.
PM unperturbed by opposition’s claim of country being in danger
Earlier today, Prime Minister Imran Khan was dismissive of the opposition’s claim that the government was in danger, saying “they make such statements every three months.”
In a brief interaction with reporters inside the parliament’s premises following the cabinet meeting, the premier also 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”.
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.
‘No burden on the poor’
Addressing a press conference after the NA session, Tarin 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.