Amid noisy protests: Rs170bn finance bill lands in NA, Senate

ISLAMABAD: The government Wednesday introduced the Finance (Supplementary) Bill 2023 in the National Assembly for the collection of additional taxes and duties of Rs170 billion to meet the IMF conditions for the 9th Extended Fund Facility.

“Approving the bill, the federal cabinet decided that the common man would not be burdened and the elite class would be taxed,” Finance Minister Senator Ishaq Dar said while giving the mini-budget details after introducing the bill.

Dar said it had been decided to enhance the GST on luxury items from 17 to 25 percent, while it was being increased on the whole from 17 to 18 percent. However, he said the GST would not be imposed on items like milk, vegetables, fruits, chicken and meat.

The minister said the IMF programme will help improve the foreign exchange reserves and rupee value and stabilize the economy.

With the collection of an additional Rs170 billion, the FBR would not only achieve the revenue collection target for the ongoing fiscal year but there would also be a reduction in the budget deficit.

He said it was also being proposed to impose the Federal Excise Duty (FED) of 20 percent on air fare or whichever was higher on those traveling through first class or business.

He said 10 percent withholding adjustable advance tax would be levied on the bills of wedding halls in order to promote simplicity and austerity.

The finance minister said the Federal Excise Duty was being enhanced on cigarettes and sugary drinks, while it was also being proposed to increase the same on cement from Rs1.5 to Rs2 per kilogram.

Dar said during the five-year tenure of PMLN from 2013 to 2018, there was an increase of 112 billion dollars in total GDP whereas there was an increase of only 26 billion dollars in four years of the PTI regime.

He pointed out that the per capital income during the PMLN tenure increased from 1,389 dollars to 1,768 dollars whereas the PTI increased this income by 30 dollars in nearly four years.

Dar said the market capitalization of Pakistan Stock Exchange, which was 100 billion dollars in 2018, also dropped to 26 billion dollars in 2022, which showed no-confidence in the PTI government.

He further said the total volume of foreign debts from 1947 to 2018 was 24,953 billion rupees which increased to 44,383 billion rupees, which upped debt servicing to over 5,000 billion rupees during the ongoing fiscal year.

He said due to unprecedented growth during the year 2013 to 2018, Pakistan was 24th best economy in the world, while the Pakistan Stock Exchange was number one in South Asia and GDP growth rate was over 6 percent and inflation rate stood at 5 percent.

However, he said after takeover by a ‘selected’ government, the national economy dropped its place from 24th to 47th in the world. “This is the gist of the PTI regime’s economic performance,” he said.

The finance minister demanded constitution of a commission to find out the truth behind the takeover of a ‘selected’ government and decline of the national economy. “Had there been a democratic change of government in 2018, Pakistan could have stood close to G-20 countries,” he said.

Dar said when the present government took over, the fiscal deficit was as high as 7.9 percent, while the trade deficit stood at 40 billion dollars and economy was on the verge of collapse. The minister said the economy badly suffered due to heavy floods last year but despite that Rs300 billion was allocated for rehabilitation.

The minister said the IMF programme was almost rolled back and it faced suspension, as the last government backed out of its agreement with the Fund.

“One must remember that any agreement with the IMF is not with any government but with the state and that was why the present regime not only had to accept the 2019 agreement but also managed to restore the programme. “We suffered politically but we preferred the State to our politics,” he said.

He said while presenting every budget from the year 2013 to 2017, he stressed the need for the national economic agenda with across-the-board consensus but unfortunately the same could not be materialized.

Dar said the government had decided to enhance the monthly cash assistance for Benazir Income Support Programme beneficiaries and for that purpose, the BISP budget was being enhanced from Rs360 billion to Rs400 billion.

Referring to the longstanding issue of circular debt in the power sector, he said it was increased from Rs1,148 billion to Rs2,467 billion in a span of four years during the PTI government tenure.

He said circular debt was estimated to increase by 855 billion rupees this year, but as a result of incumbent government’s reforms, it would be brought down to Rs336 billion.

The minister for finance pointed out that the State Bank of Pakistan had issued a priority list for import of food items, pharmaceuticals and raw material for the export industry.

The mini-budget proposals faced opposition from Chairman Public Accounts Committee (PAC) Noor Alam Afridi and Jamaat-e-Islami (JI) member Maulana Abdul Akbar Chitrali who categorically rejected proposal as contained in the Finance (Supplementary) Bill, 2023. Afridi opposed the imposition of additional taxes on the wedding halls and plans to increase the power tariffs. He also asked Dar under which agreement he reached an understanding with the dollar mafia and its rate was fixed at Rs275 and how it was being smuggled to Afghanistan.

He suggested that all the agreements reached with the IMF to-date should be placed separately before the two houses of the parliament. Afridi maintained that he would not become a part of approval of the mini budget in the House.

Criticising the government, Maulana Abdul Akbar Chitrali questioned as to why Senator Ishaq Dar had not been able to bring the US dollar’s rate down to Rs200.

He said the incumbent government talks about austerity while on the other hand, there were 10 vehicles escorting minister for foreign affairs from the Parliament House to his office in the Foreign Office.

Following the finance minister’s speech in the House, Speaker Raja Pervaiz Ashraf announced that the bill would not be sent to the National Assembly Standing Committee as per rule 122 of Rules of Procedures and Conduct of Business in the House.

Meanwhile, Finance Minister Ishaq Dar laid a copy of the money bill in the Senate amid a noisy protest by the opposition.

The bill has been placed in the House to amend certain laws as required under Article 73 of the Constitution.

As the chair asked State Minister for Law Shahadat Awan to move a motion for suspension of rules in relation to the Question-Hour, the opposition senators started thumping desks and chanted slogans, while the opposition leader sought the floor to speak first.

After the motion was moved, Chairman Senate Muhammad Sadiq Sanjrani gave the floor to the finance minister, who laid a copy of the bill in the House. By this time, the opposition legislators gathered in front of the chairman’s dais while some stood close to the minister. The sergeant-at-arms moved in to avert any unpleasant situation.

The opposition lawmakers chanted full-throated slogans like ‘imported government unacceptable’ and ‘imported budget unacceptable’. Some of them even tore agenda copies apart and tossed them in the air.

The chair directed the members to submit their proposals to the Senate Secretariat by Thursday morning till 10am for consideration by the House Standing Committee on Finance and Revenue. Afterwards, the committee will submit its report to the House by Friday morning for consideration. The House will finally consider the report and make recommendations to the National Assembly the same day.

As the opposition persisted with its protest, the House was adjourned to meet again on Friday at 10:30am.