Tax-laden Finance Bill sails through NA: 10pc surcharge on tax on annual income of Rs10m or more imposed

ISLAMABAD: Amid the opposition walkout, the National Assembly Friday passed by majority vote the tax-laden Finance Bill 2024 with a total outlay of Rs18.877 trillion.

All the amendments moved by the opposition for incorporation into the Finance Bill 2024 were rejected by majority vote. However, the amendments moved by Finance Minister Senator Muhammad Aurangzeb were adopted. The opposition opposed the budget, terming it “anti-people and IMF-tailored”.

One notable change is the exemption from advance tax on the sale or transfer of immovable property under Section 236C for retired and serving federal and provincial employees, retired and serving armed forces personnel, and individuals injured in war.

Through another amendment, the income tax rate has been reduced for the Association of Persons (AoPs) from 45 percent to 40 percent on the annual income exceeding Rs5.6 million. However, individuals or AoPs earning more than Rs10 million annually will now be subject to a 10 percent surcharge on their income tax.

The federal excise duty rate on cement has been increased to Rs4 per kg, which will alone yield Rs80 billion. This will increase per bag cement price by at least Rs100.

Five percent (5%) Federal Excise Duty (FED) has been imposed on the lubricant oil which will fetch additional Rs15 billion.

The FED on international travel tickets has also been increased. The tax rate for the economy class has been increased to Rs12,500, while for the business class, the new tax per ticket is Rs350,000 for Americas, Rs105,000 for Middle East and Europe and Rs210,000 for Australia, New Zealand and Pacific.

Three percent (3%) FED has been slapped on allotment or transfer of property by filers and 5% by non-filers.

Eighteen percent (18%) sales tax has been imposed on vegetables and fruits imported from Afghanistan, pencils, drawing materials, diagnostic kits, and tractors.

Meanwhile, a capital value tax has been introduced on the farmhouses and residential houses in Islamabad as part of the Finance Bill 2024.

Under the new amendments, farmhouses ranging from 2,000 to 4,000 square yards will have to pay a tax of Rs500,000, while those exceeding 4,000 square yards will incur a tax of Rs1 million.

For residential houses, a tax of Rs1 million will be levied on properties ranging from 1,000 to 2,000 square yards, while residential houses exceeding 2,000 square yards will be taxed Rs1.5 million.

Following the passage of the finance bill, the House also passed the Elections (Amendment) Bill, 2024 (Ord. No. V of 2024) by majority vote that seeks to restore the original provision of Section 140, making retired high court judges eligible for appointment as members of the election tribunal for hearing election petitions related to the National Assembly, the Senate, and provincial assemblies.

Minister for Law and Justice Azam Nazeer Tarar, who also holds the portfolio of Minister for Parliamentary Affairs, moved the bill.

The PTI-backed SIC opposed the bill and also raised slogans.

The SIC walked out of the House when Speaker Sardar Ayaz Sadiq refused to give the floor to Asad Qaiser, who wanted to speak on the statement of Defense Minister Khawaja Asif with regard to hideouts of TTP in Afghanistan.

He was of the view that Asad Qaiser should speak on the amendment to the Finance Bill 2024 instead of other issues, but Asad Qaiser said he wanted to raise the issue of statement of Defence Minister Khawaja Muhammad Asif.

After not getting the floor, he along with other members of the opposition walked out of the House.

After the opposition’s walkout, the Finance Bill, 2024 sailed through the lower house of the Parliament.

The opposition come back after the passage of the Finance Bill 2024.

Syed Naveed Qamar and Ijaz Jhakrani of PPP talked to the opposition to end their walkout.

Earlier, responding to the points of opposition on the Finance Bill, 2024, Aurangzeb expressed the government’s determination to further enhance the stabilization process to steer the economy towards growth.

Sharing the economic indicators, he pointed out that there was reduction in the current account deficit (CAD) and the fiscal deficit was also under control. He said the rupee had been stable over the last six to seven months, expressing confidence that this stability had come to stay.

He said the foreign exchange reserves had reached $9 billion and that the inflation had come down to 11 percent from 38 percent.

Aurangzeb said enhancing the tax to GDP ratio and reforms in the SOEs and energy sector were part of the budget.

He said the tax to GDP ratio would be increased to 13 percent in the next three years.

“Our privatization plan consists of two to three years and it will be executed,” he said.

Aurangzeb said stents, surgery items and books as well as ex-Fata and Pata had been exempted from tax.

He said tax exemption for education and health was given in very difficult economic conditions.

He further said exemptions to the agricultural inputs like fertilizers and pesticides as well as researchers and teachers would continue.

“We all need pure milk and we want to promote it, but tax exemption cannot be given on packed milk which is not of standard,” said the finance minister.

Earlier, Chairman Standing Committee of the National Assembly on Parliamentary Affairs Rana Iradat Sharif presented the committee’s report on The Elections (Amendment) Bill, 2024.

Law Minister Azam Nazeer Tarar said the amendment aimed to expedite the settlement of petitions pertaining to the elections of the National Assembly, the Senate, provincial assemblies, and local governments.

He explained that owing to the workload on the serving judges, the proposed amendment sought to restore the original provision of Section 140, making the retired high court judges eligible for appointment as members of the Election Tribunal for hearing the election petitions.

Additionally, for local government elections, the amendment proposes making the retired district and session judges eligible for appointment as members of election tribunals.

He said the power to establish election tribunals rested with the Election Commission of Pakistan.

Meanwhile, the House approved 53 supplementary demands for grants pertaining to various ministries and divisions for 2022-23 and 25 demands for Fiscal Year 2023-24.

The House also approved 26 excess demands to meet the excess expenditure of various ministries and divisions for FY2022-23.

The House approved 53 supplementary and additional demands of more than Rs740.72 billion for the Financial Year 2022-23 and 26 additional demands of more than Rs141.2 billion for the same financial year.

Speaking in the National Assembly Defense Minister Khawaja Muhammad Asif while responding to Asad Qaiser said he had talked about the evidences of terrorist hideouts in Afghanistan.

“We will ensure the safety of our people,” he said.

He criticized PTI saying they had links with the Taliban, which brought the TTP in Pakistan.

The House also passed by majority vote an amendment to raise the allowances of MNAs.

The amendment was moved by the PPP legislator Abdul Qadir Patel during the consideration of the Finance Bill 2024-25.

The opposition — PTI-backed Sunni Ittehad Council (SIC) — opposed the amendment to increase the allowances of MNAs.

According to the approved amendment, the travel allowance of parliamentarians has been increased from Rs10 to 25 per kilometer.

The MNAs can now use the air tickets for the next year in case of their expiry and the finance committee of the National Assembly will have the powers over the salaries and allowances of MNAs as earlier, this power rested with the federal government.

Speaking in the House, Prime Minister Shehbaz Sharif said Rs590 billion had been given to Khyber Pakhtunkhwa over the years to augment its capacity in the war on terrorism.

Responding to the points of PTI senior leader Asad Qaiser, he regretted that the counter terrorism department had not yet been established in Khyber Pakhtunkhwa.

He said the people of Khyber Pakhtunkhwa were brave and they had rendered immense sacrifices in the war on terrorism.

“Undoubtedly, the people of Khyber Pakhtunkhwa have made great sacrifices; other provinces, including Balochistan, also made great sacrifices, but they did not get anything. Even the CTD could not be established in Khyber Pakhtunkhwa. Despite Rs590 billion, the CTD is incomplete. We don’t want to do politics,” he said.

He said for the appointment of Khyber Pakhtunkhwa chief secretary, a panel of three names had been constituted as per tradition but no response came from the KP.

“If they do not like any of the names from this panel, then let us know. We will constitute a panel containing more names,” Shehbaz said.

The prime minister recalled that the province was given an additional one percent in resources in the National Finance Commission Award, agreed upon back in 2010.

Shehbaz hailed the swift approval of the budget and praised Finance Minister Muhammad Aurangzeb and his team for preparing a pro-people budget that prioritized welfare of the common man and promised to steer the country towards economic prosperity.

Talking to the finance minister in the National Assembly after the passage of the budget, he expressed his satisfaction over the active participation of all the treasury and opposition members in the budget session.

He also appreciated the efforts of officers from the ministries of finance, planning, other relevant ministries and Federal Board of Revenue (FBR) in preparation of the budget.

The government, he said, tried its best to utilize all possible resources to provide maximum relief to the common man. He said the government provided relief to the salaried class, pensioners and workers.

He highlighted that special attention was given in the budget to various important sectors such as health, education, agriculture, and information technology.

He said the elite class and tax-evaders would be brought into the tax net.

“It is not possible that the poor pay the taxes and the elites enjoy tax exemptions,” he added.

Expressing satisfaction over the economic situation, the prime minister said the country’s economy had now been put on the right path and that Pakistan’s journey of prosperity had begun now.

He said due to the business-friendly policies, the trust of investors had been restored in the government.

He said the government was taking steps to bring reforms in the departments and privatize the loss making state-owned entities on priority.

Meanwhile, Finance Minister Senator Muhammad Aurangzeb met Chairman Pakistan People’s Party Bilawal Bhutto Zardari at the Parliament House and thanked him for his party’s support to the budget.