With a lackluster resistance from the number-weak opposition benches, the PML-N government got the Finance Bill 2013-14 approved from the Lower House of parliament with a majority vote.
With the passage of the bill, which has an outlay of Rs 3.591 trillion, the government also succeeded in providing legal cover to its decision of collecting one percent increase into the General Sales Tax (GST) from June 13 – the day the government had introduced the finance bill in the National Assembly.
Moreover, in a smart move, the government also provided protection to the GST collected from June 13 to June 22 for which the Supreme Court had ordered submitting the amount with the SC registrar.
Minister for Finance Ishaq Dar moved the bill with a number of amendments incorporated into the original budget document. The House also rejected majority of amendments proposed by the opposition with a majority vote. About 21 recommendations proposed by the Upper House had been incorporated into the bill.
Winding up the debate on the finance bill, Dar said it would be in national interest that the GST collected since June 13 be submitted to the exchequer rather than the middlemen benefiting from it.
“Yes, we collected GST from June 13 until June 21. However, with the Supreme Court’s decision made on June 21, we submitted to the verdict and suspended the operation on June 22. But the businessmen would be charging the GST from consumers since June 22. So it would be a better decision that the GST be added to the exchequer rather than the business community who would benefit in such a case,” he added.
He categorically said the government had refused to give in to the pressure by the International Monetary Fund (IMF) to impose more taxes for its bailout package to Pakistan.
“The IMF demanded levying new taxes of Rs 475 billion but we flatly refused to burden our people. Programme or no programme, we shall not impose further taxes,” Dar said while responding to the observations raised by the members over the finance bill.
“The IMF programme should be on our terms. Tax collection target of Rs 2,007 billion is a ‘tall order’ but we shall achieve it by increasing the tax net and stopping tax theft,” he added.
He said the data for tax collection already existed, adding, “What we need is an effective connectivity. We have also increased the amount of fine to be charged and the period of imprisonment for tax evaders.”
The finance minister clarified that perks and privileges of speakers and the chairmen of the Senate as well as the members were being adjusted to the same level as were before 2010 and 2012 respectively.
“We are going to the same old position and there should be no confusion. We need to set good examples. At least the people should feel that we are not getting any extra benefit on their hard earned tax money,” he added.
The minister said the government honoured the SC’s decision regarding the collection of GST from June 13. “But, this tax is still collected from the consumers and is not coming to national kitty.”
He also rejected the notion that a one-percent increase had resulted in an increase of four to five percent in tax collection.
He also clarified that the government had not introduced any mini-budget, saying the proposals in the finance bill were not passed just like that… the final shape came into being after inclusion of the members’ recommendations as well as those coming from the Senate.
Dar said currently the tax collection rate was even lesser than the inflation rate and this was the failure of the economic policies of the previous government. He said no tax had been imposed on pilgrims.
“Rather it is the income tax effect on the operators which was imposed in previous year’s budget to the tune of Rs 2,500. We have only proposed to increasing it to Rs 5,000 and we are discussing it with the operators.”
The finance minister asked the opposition not to play politics on the budget. “When the country is in such a serious financial crisis, we need not to play politics. The government is trying its best and we need support from everybody. Let us work hard for at least three years, thereon we shall have time for politicking.”
He also clarified that a number of kitchen items were already exempted from tax to facilitate the poor.
Earlier, Syed Naveed Qamar said the clause in the bill concerning wages will create discrimination among the salaried class. “This matter should have been discussed at the Finance Committee,” he added.
PTI leader Shah Mahmood Qureshi said imposition of GST from June 13 was unconstitutional and the Supreme Court had endorsed the opposition’s stance in its decision.
He said the government did not heed to the opposition’s suggestions and its measures would put an extra burden on the poor.
Moreover, government’s figures had raised many questions and even the IMF was not satisfied with them.
Syed Asif Hasnain of the MQM said the previous government did not impose GST on the demand of the people and it was good decision. “The budget has been prepared on the dictation of the IMF” and claimed that GST would range from 4 percent to 19 percent.
Sheikh Rasheed of the Awami Muslim League said salaries should be increased by 15 percent and the government should have burning issues on its agenda such as the provision of electricity, water, gas and provision of edibles on economical rates to relieve the poor.
He also demanded that all incomplete projects in his constituency be completed.
Dr Azra Fazl Pecheho and Dr Arif Alvi argued that elite should be taxed and not the poor, adding that more people should be benefited from loan facility on housing, and a realistic policy regarding power tariff increase should be adopted.
Dr Nafeesa Shah described the budget as “jugglery of figures” and “tyranny of taxes”. She said most of the taxation will directly affect the poor, fearing that such a tax regime would result in leakages. She said measures proposed in the finance bill will also affect the banking sector.
SA Iqbal Qadri opposed retrospective amendments for tax collection and defined it as “injustice to the poor people” He also sought the chairman’s ruling on the points raised by him in the House.
Amjad Khan Niazi termed the budget “a jugglery of words”. He claimed that the budget was prepared on the dictation of the IMF as indirect taxes were being imposed instead of direct taxes which he said would result in price hike.
He also objected to bringing FATA and PATA into the tax net and claimed that more people would be inclined towards militancy if poverty increased. “Let us facilitate the farmers and the peasants, control load shedding and revive industry.”
Sahibzada Tariqullah praised certain measures for the youth, the education sector and cutting non-development budget but called upon the government to introduce a judicious taxation system. He objected to the proposal of giving authority to the FBR to access online accounts of individuals.
SUPPLIMENTARY GRANTS APPROVED:
The National Assembly also approved 121 supplementary demands for grants and appropriations for the year 2012-13, worth Rs 327,812,025,000.
The finance minister moved the demands of supplementary grants which were approved by a majority vote.
The supplementary grants were approved for the Cabinet Division, the Climate Change Division, the Commerce Division, the Communication Division, the Defence Division, the Defence Production Division, the Economic Affairs Division, the Finance Division, the Higher Education Commission, the Foreign Affairs, Housing and Works, the Human Resource Division, the Industry Division, the Information and Broadcasting Division, the Inter-Provincial Coordination Division and the Interior Division.
The other divisions for which the supplementary grants were approved included, Kashmiri Affairs and Gilgit-Baltistan, Law and Justice, District Judiciary Islamabad Capital Territory, Senate, National Food Security and Research Division, National Harmony Division, National Heritage and Integration Division, National Regulation and Services Division, Overseas Pakistanis Division, Parliament Affairs Division, Petroleum and Natural Resources Division, Ports and Shipping, and eth Postal Services.
In addition, grants were also approved for Privatisation Division, Professional and Technical Training Division, Religious Affairs Division, State and Frontier Regions Division, FATA, Textile Industry, Water and Power, Planning and Development Division, Information Technology and Telecommunication Division, Petroleum and Natural Resources, the Water and Power Division.
