Thursday Dec 30 2021

Govt unveils supplementary finance bill in line with IMF's demands

Federal Minister for Finance and Revenue Shaukat Tarin. — APP/File
Federal Minister for Finance and Revenue Shaukat Tarin. — APP/File

  • Opposition stage a vehement protest, chant slogans to prevent Tarin from introducing Finance Bill 2021.
  • PML-N leader Khawaja Asif says PTI-led govt is trying to "enslave Pakistanis financially."
  • Supplementary finance bill was one of the conditions of the IMF which was to be met before Jan 12, 2022.

ISLAMABAD: Federal Minister for Finance Shaukat Tarin on Thursday presented the much-awaited supplementary finance bill — termed by the Opposition as a "mini-budget" — in the National Assembly, as a pre-requisite to resume the $6 billion External Fund Facility (EFF) of the International Monetary Fund (IMF).

The Opposition staged a vehement protest and chanted slogans to prevent Shaukat Tarin from introducing the Finance Bill 2021 and SBP Amendment Bill in the House.

Besides the aforementioned bills, Tarin moved a resolution to "extend the Tax Laws (Third Amendment) Ordinance, 2021 [...] for a further period of one hundred and twenty days w.e.f. 12-01-2022, under proviso to sub-paragraph (i) of paragraph (a) of clause (2) of Article 89 of the Constitution of the Islamic Republic of Pakistan.

In addition, he moved another resolution "to extend the Federal Government Properties Management Authority Ordinance, 2021 [...] for a further period of one hundred and twenty days w.e.f. 15-12-2021, under proviso to sub-paragraph (ii) of paragraph (a) of clause (2) of Article 89 of the Constitution of the Islamic Republic of Pakistan”.

In all, eight resolutions were moved to extend various ordinances.

Opposition protests bill

PPP's Naveed Qamar protested the government's move to extend ordinances, saying that "they have expired, so how can they be extended?"

Adviser to the Prime Minister on Parliamentary Affairs Babar Awan responded by saying that the government had introduced the ordinances in parliament prior to their expiry.

At one point in the session, PPP's Shazia Marri objected to the strength of lawmakers in Parliament. At this, the speaker instructed all MNAs to stand at their seats for a headcount.

'Don't sell Pakistan'

Speaking on the occasion, PML-N leader Khawaja Asif said the sovereignty of Pakistan is being sold. “The nation is ashamed of what is happening in the House today,” he added.

He further said that the PTI-led government is trying to "enslave Pakistanis financially."

"You're giving the State Bank of Pakistan’s (SBP) control to IMF. Please don’t surrender Pakistan’s sovereignty,” he reiterated.

Highlighting the promises made by the PTI leaders, he said that the government has been lying to the people for the last three years and recent local body elections in Khyber Pakhtunkhwa are proof of this.

The PML-N stalwart lamented over the government "increasing the prices of everyday items".

‘The world praises us’

Replying to the allegations of Asif, Federal Minister for Planning and Development Asad Umar said that the difference between them [the Opposition] and us is that when they work to curb dengue, they have to advertise about it themselves.

“But when we [PTI] works to curb COVID-19, the world praises the us,” he said

Reacting to Asif's remarks about surrendering the sovereignty of Pakistan, he said: "It is the height of shamelessness that a Pakistani leader is speaking about surrendering the country's sovereignty.”

He also lambasted the opposition for criticising the PTI’s defeat in KP local body elections, adding that if JUI highlights the results it would make sense.

'It is regrettable that the Opposition's voice is not being heard'

PPP's Raja Pervez Ashraf decried the government's introduction of the bill.

He said: "This legislation is not for the PTI, or the PML-N, or the PPP. It is for the people." 

"It is regrettable that the Opposition's voice is not being heard," he added.

The PPP leader said that whenever inflation rises, the Opposition is blamed.

"A nation of 220 million is waiting for you (to transform their lives). But the government is clueless," the PPP leader said.

He remarked: "When the ordinances lapse, they rely on you."

He went on to say that the government "compels the Opposition to move a no-trust bid against the speaker".

Reflecting on the past three-and-a-half years, Ashraf said that petrol, electricity and gas, as well as prices of food items have risen manifold. "Can we not discuss this?"

He called on the speaker to play the impartial role that his designation demands.

The PPP leader said that the government's policies "have broken the backs of the people".

"Whether it is a rich man or poor, they all curse the government," he said.

"I plead with you to withdraw today's proceedings," Ashraf said.

He told the speaker to listen to the Opposition, as well as the government, and then decide whether this "cruelty" that has been unleashed on the people is justified.

Opposition protests against ‘false budget’

PML-N Spokesperson Marriyum Aurangzeb, speaking to the media outside the Parliament House, said that the Opposition will fight the oppressors who have put pressure on the pockets of common people.

“The mini-budget will cause more inflation to burden the masses,” she said, adding that the Opposition will protest against the government "inside and outside the Parliament."

Terming the bill as the “false budget”, the PML-N leader said: “Prime Minister Imran Khan lies every day, he should be held accountable for the soaring inflation.”

“The government has enslaved the people under the IMF, we will fully contest the mini-budget,” she said.

Supplementary finance bill

According to the finance ministry's proposal, the government will impose a tax on approximately 150 goods at a rate of 17%. Therefore, goods that were currently either completely exempt from General Sales Tax (GST) or being taxed at 5% to 12% rates would now be taxed at 17%.

  • The income tax rate on mobile phone calls will increase from 10% to 15%.
  • It was also proposed that imported meat and poultry items should be exempted from tax.
  • Meanwhile, the GST rate on cars above 1,000cc will go up to 17% and the tax on the import of electric vehicles in CBU conditions will increase from 5% to 17%.
  • Zero-rating available on supplies of raw materials for imported milk would be withdrawn and be taxed at 17%.
  • Duty-free shops will be taxed at 17%. As they will be taxed for the first time, there are no revenue estimates.
  • The finance bill also proposes that bread prepared in bakeries, restaurants, food chains and shops be taxed at a 17% rate.
  • Sales tax on prepared foodstuff and sweetmeats supplied by restaurants, bakeries, and sweet shops will increase to 17%.
  • Goods received as gifts from a foreign government or organisation will be taxed at 17%.
  • Cottonseed is proposed to be taxed at 17% GST. Meanwhile, the bill proposed increasing the tax on machinery for the poultry sector from 7% to 17%.
  • The GST on silver and gold will increase from 1% to 17%, while tax will be imposed on computers and laptops.
  • Raw material for medicines will be taxed at 17% GST.

According to the bill, the end of tax exemption on imported food items will impose an additional burden of Rs215 billion.

The "mini-budget" was one of the conditions of the IMF which was to be met before January 12, 2022, in order to recover more than $1 billion in instalments from the Fund.

Earlier, Prime Minister Imran Khan had summoned a federal cabinet meeting to approve the Finance Bill, which was later to be presented in the National Assembly.

Following the meeting, Federal Minister for Broadcasting and Information Fawad Chaudhry confirmed on Twitter that the federal cabinet has approved the bill.