• Tax exemption on baby formula, red chilli and iodised salt retained
• Increase in sales tax on mobile phones, hybrid and electric vehicles, poultry and livestock, dairy and bakery items
Islamabad: The Pakistan Tehreek-e-Insaf-led coalition government razed 16 bills, including two controversial ones needed to meet International Monetary Fund (IMF) conditions, amid uproar by opposition both inside and outside Parliament. – Hours sat Thursday night.
Although the government managed to pass both – the Finance (Supplementary) Bill 2021 and the State Bank of Pakistan (Amendment) Bill 2021 – from the lower house, it fell four short of the crucial figure of 172 votes that are required. The election of the prime minister during a vote on an amendment.
Reading: ‘Mini-budget’: What will be costly?
The Prime Minister, who normally attends parliamentary meetings only on important occasions, remained in the House for most of the duration of the session, lasting till midnight.
Leader of the Opposition Shahbaz Sharif, Pakistan People’s Party chairman Bilawal Bhutto-Zardari and former President Asif Zardari also spent most of the session in the assembly. They initially walked out of the House after the first vote on the amendment, but went back to their seats when the speaker ordered another physical vote on the demand of the opposition.
The amendment was put to vote by Speaker Asad Qaiser after the opposition challenged the rejection of the same through a voice vote. The House later rejected another amendment moved by opposition members to 146 with 163 votes.
At the end of the session, opposition members gathered in front of the speaker’s podium with placards after Deputy Speaker Qasim Suri rejected his request to adjourn the State Bank of Pakistan (Amendment) Bill 2021 for a day and keep it and raised anti-government slogans. To vote.
In protest, opposition members moved their amendments after Mr Suri heard his requests on a motion seeking suspension of rules for taking up the SBP Bill without providing the stipulated 48 hours for consideration of the committee’s report. refused to transfer.
Opposition members attempted to disrupt the proceedings by citing quorum, but the Speaker hastily called for the introduction of one bill after another so that the agenda could be wrapped up before midnight. According to the rules, after the change in the date, a new agenda will have to be presented.
PML-N leader Ahsan Iqbal also opposed not to take up the Senate’s recommendations on the Finance Bill before the House, terming it an “insult to the Senate”.
Later Mr. Iqbal was seen begging on a chair with folded hands for not bulldozing the SBP bill.
“If you suspend the rules in the dark of night and bulldoze the bill, your name will go down in history among those who conspired to sell the country’s economic sovereignty,” he said.
“Why are we pretending that we are doing it at gunpoint,” said PPP’s Syed Naveed Qamar.
Mr Bhutto-Zardari termed the SBP Bill as a threat to national security and questioned why the government was forcing only one bank account for defense expenditure. By doing so, he said he was offering world powers an opportunity to examine the country’s defense budget and its nuclear program, which, he said, could be the next target.
“Your prime minister has been set up to destroy Pakistan politically and economically,” said Asad Mahmood of Jamiat Ulema-e-Islam (JUI-F).
However, Defense Minister Pervez Khattak lost his patience with the process and, at one point, asked the speaker to ignore the opposition and “bulldoze” the bills.
Earlier in the day, PPP and PML-N held separate demonstrations outside Parliament House and leaders like Shahbaz Sharif also addressed the crowd.
mini budget
The mini-budget was heatedly debated in the House as opposition members slammed the government for imposing Rs 350 billion in new taxes on the IMF’s order and accused it of surrendering the country’s economic sovereignty.
Impressed by resistance from the main opposition parties, Finance Minister Shaukat Tarin introduced six minor amendments to the old version of the Finance Bill 2021.
Meanwhile, the treasury rejected all the amendments proposed by the opposition parties.
The bill is believed to resume pending payments under the $6 billion Extended Fund Facility (EFF). So far, Pakistan has received about $ 2 billion under this facility. The IMF had originally sought to withdraw the tax exemption of Rs 700 billion.
The IMF board meeting was scheduled for January 12, but has now been rescheduled for the end of the month.
Mr Tarin explained to lawmakers that the tax exemption of Rs 112 billion on machinery and Rs 160 billion on the pharmaceutical sector was adjustable and refundable. He said these were not taxes, which would now be collected at the rate of 17 per cent on imports from the machinery and pharmaceutical sector.
The minister, however, acknowledged that the tax levied on those goods, which would directly or indirectly affect the common people, would raise around Rs 71bn to help the government.
The minister also revealed that the government has amended its bill and exempted several daily use items including bakery items, computer laptops and baby food from additional taxes. He claimed that this was not done at the insistence of the opposition but after consultation with the stakeholders.
discount and increase
The new Finance Bill raises the rate of GST on 42 items from 1-10 pc to 17 pc, a change that is expected to raise an additional Rs 30 billion. These include locally manufactured cars, hybrid electric vehicles, import of re-meltable scrap, dairy items sold in branded packaging, branded cereals, silver and gold bars and jewelery and a variety of plant machinery.
The government has retained the exemption on selling baby formula for retail purchase of less than Rs 500 per 200 grams. Similarly, the government has retained sales tax exemption on red chilli and iodised salt.
Seventeen percent sales tax has been levied on the sale of food items such as bread, vermicelli, naan, chapati, sheermal, bun and rusk sold in bakeries, restaurants, food chains and sweet shops that fall under the category of Tier-I retailers. . However, these products will be exempted from sales tax at other stores falling below this category.
The exemption has also been withdrawn on zero-rated items including import of large vessels for repair and maintenance, imported bicycles and imported formula milk.
The Finance Bill also withdraws tax exemptions on local supplies of 11 items, including bakery items and sweet meats, in-flight meals, sausages and branded poultry and meat products, locally produced rapeseed, mustard (cotton equivalent) Are included. seed oil), sprinklers, drip and spray pumps.
However, the government claims that it will reduce the impact of price hikes on the public through targeted subsidies.
The sales tax rate on high-end mobile phones costing $200 and above has been raised, while the fixed sales tax amount is replaced by the standard rate of 17pc of the ad value. The government expects to raise an additional Rs 7 billion from this change.
Sales tax on locally manufactured hybrid electric vehicles up to 1800cc was approved at the rate of 8.5pc, followed by 12.75pc on vehicles from 1,801cc to 2,500cc.
At the import level, exemptions on 59 items were withdrawn, leading to a net profit of Rs 206 billion to the exchequer. These include live animals, birds and eggs, cows, buffaloes, sheep, goats, poultry and fish, vegetables (except imported from Afghanistan), cereals, fish feed and animal feed, magazines and magazines as well as pharmaceutical raw materials . However, local supplies of all these items are exempted from sales tax.
The government has also withdrawn exemption on import of 19 capital goods, which will raise Rs 82bn for the government kitty. These include power generation, power transmission, renewable energy such as solar, wind, nuclear, mining and extraction of minerals, etc.
Tax on transfer of newly purchased vehicles has also been increased to discourage the practice of own money in such transactions.
Published in Dawn, January 14, 2022