The National Assembly on Thursday passed the State Bank of Pakistan (Amendment) Bill 2021 and Finance (Supplementary) Bill 2021, termed by the opposition as a mini budget, that allowed the PTI-led government to achieve a tax target of Rs5.8 trillion as required by the International Monetary Fund (IMF) amid ruckus created by the Opposition during a prolonged session.
The approval of the supplementary finance bill was necessary to ensure sixth review of the $6 billion Extended Fund Facility (EFE) gets cleared by the IMF’s executive board which is scheduled to meet later this month to decide the disbursement of the $1 billion tranche.
Last month, Finance Minister Shaukat Tarin introduced two bills in parliament to give effect to the Rs375 billion mini budget and grant autonomy to the central bank.
The assembly had on Tuesday formally begun a general debate on the mini budget which saw the coalition partners in the ruling alliance under the PTI joining their voices with the opposition over possible implications of the new taxation measures.
In the amended bill, the government rolled back its plan to impose additional sales taxes on children’s formula milk, bread, and small cars. It also withdrew the proposal to impose taxes on laptops and computers.
The government’s amendments to the proposed bill were approved by the NA. The changes include:
- No general sales tax will be imposed on a 200-gram carton of milk.
- A 17% GST will be imposed on formula milk worth Rs500.
- Tax on imported vehicles has been increased from 5% to 12.5%.
- The federal excise duty on all imported vehicles will remain unchanged.
- A 2.5% duty will be charged on locally manufactured 1,300 cc vehicles, which was previously around 5%.
- Duty on locally manufactured 1,300 to 2,000cc cars also reduced to 5% from 10%.
- A 10% duty will be imposed on locally manufactured cars greater than 2,100 cc.
- No sales tax will be imposed on iodised salt and red chillies.
The opposition’s amendments to the bill were rejected and when the voting took place, 150 members voted in favour of the amendments, while 168 voted against them.
By this measure, the government had an edge with 18 parliamentarians to get the bill passed.
The National Assembly comprises 342 lawmakers, of which the government has 182 MNAs, while the opposition has 160 MNAs.
In today’s session, 14 of the government’s lawmakers were absent, while 10 from the Opposition’s side didn’t show up.
Finance minister Tarin, while talking about the supplementary bill also dubbed as the “IMF bill”, said that during the previous government’s tenure, 13 agreements were signed with the Fund.
“They are saying that IMF has destroyed the economy of Pakistan, while they went to the IMF in their tenures as well,” he said.
Tarin said that the PTI government is being accused of “mortgaging country’s sovereignty”; however, the government was forced to approach the IMF.
“We had no other option but to ask for IMF’s help,” he reiterated.
PTI’S INTERNAL RIFT: Prior to the commencement of the crucial NA session, Prime Minister Imran Khan arrived at parliament and held a meeting of the parliamentary groups of parties included in the ruling alliance led by the PTI to supercharge the efforts to counter the opposition’s resistance and steer the bill into law.
Reportedly, there was a heated exchange between Defence Minister Pervez Khattak and Energy Minister Hammad Azhar over the lack of natural gas supply to Khyber Pakhtunkhwa.
Khattak expressed his displeasure over the current situation and reportedly later left the meeting. He, however, later came back to the meeting and said he had stepped outside to “smoke”.
The opposition also helding a protest outside parliament, led by Opposition Leader in NA and PML-N President Shehbaz Sharif.
Addressing party supporters, he said the opposition has “rejected the mini-budget” as it would further burden the common man under a slew of new taxes and would increase inflationary pressure.
On the other hand, Information Minister Fawad Chaudhry said the mini budget will bring stability to the country’s economy.
BILAWAL: PPP Chairman Bilawal Bhutto-Zardari criticised the PTI-led government, saying that PM Imran and Finance Minister Tarin “are not men of their words”.
Bilawal said before becoming the finance minister, Tarin had termed the IMF deal adverse for the country and pledged to renegotiate. “He is not a man of his word.”
The PPP leader said no prime minister in the past had ever made tall claims like PM Imran that “he would commit suicide instead of going to the IMF”.
PML-N’s Rana Tanveer Hussain said the PTI-led government’s claims of economic growth are misleading and instead of fixing the fundamentals of economy, it is finding an easy way to boost tax revenues.
Former premier Shahid Khaqan Abbasi questioned the claims of the finance minister that the finance bill will not put the burden on the masses, saying “then why the mini-budget is being introduced”.
He also asked the minister to assure the house that the finance bill will not trigger a new wave of inflation and prices of medicines will not go up.
SBP BILL: Finance minister Tarin said there is nothing wrong in the SBP amendment bill as the authority of appointing the SBP governor and its board members would rest with the government.
He said the government wanted to give autonomy to the central bank in line with the vision of ruling PTI which he said is good for the country’s economy.
Planning Minister Asad Umar said for the last two-and-a-half years, the government had not taken any loan from the central Bank, “therefore, the passage of SBP bill, 2021 will not have any negative impact on the country”.
Opposition members staged protest against the passing of the SBP bill, terming it against the country’s interest.
“With the passage of the SBP bill, your [NA speaker] name will be among those who are putting the country’s sovereignty at stake,” PML-N’s Ahsan Iqbal said.
“I beg you [NA speaker] not to allow this bill to be passed, we will not let the SBP sovereignty be compromised,” he added.