Friday December 08, 2023

Opposition likens supplementary finance bill to Pakistan's 'surrender' to the IMF

The supplementary finance bill is a pre-requisite to resume IMF's $6 billion External Fund Facility

By Web Desk
December 30, 2021

PPP leader Raja Pervez Ashraf and PML-N leader Khawaja Asif addressing a session of the National Assembly called by the government to introduce the supplementary finance bill, in Islamabad, on December 30, 2021. — Twitter/NAofPakistan
PPP leader Raja Pervez Ashraf and PML-N leader Khawaja Asif addressing a session of the National Assembly called by the government to introduce the supplementary finance bill, in Islamabad, on December 30, 2021. — Twitter/NAofPakistan

Minister for Finance Shaukat Tarin on Thursday introduced the government's supplementary finance bill for final approval in the National Assembly after it was okayed by the federal cabinet, prompting outrage by the Opposition who termed it "Pakistan's surrender to the IMF (International Monetary Fund)".

The session, chaired by National Assembly Speaker Asad Qaiser, included the supplementary finance bill as part of the agenda as item number 4.

The Opposition loudly chanted anti-government slogans throughout the session to protest against the bill, due to which  Tarin, when he stood up to introduce it, could scarcely be heard.

The speaker announced that detailed discussion on this legislative proposal would be held in the House and the bill would not be referred to the standing committee on finance.

The House also took up a supplementary agenda under which Tarin introduced the State Bank of Pakistan (Amendment) Bill, 2021. The bill was referred to the relevant committee for deliberation.

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.

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.

'Economic sovereignty of Pakistan being sold'

PML-N leader Khawaja Asif, while addressing the session, said: "Today, the economic sovereignty of Pakistan is being sold after gagging the people."

"The whole nation is ashamed of what is happening in the House today," he said.

He asked that his voice not be silenced and he be allowed to speak.

"You are enslaving us financially," Asif went on to say, adding that the government is "handing over control of the SBP (State Bank of Pakistan) to the IMF (International Monetary Fund)".

He pleaded with the government to not surrender Pakistan's sovereignty.

"You used to chant slogans that rivers of milk and honey will flow," Asif said in scathing criticism of the government, adding that it has been "lying" to the people for three and a half years.

"All the constituencies in KP (Khyber Pakhtunkhwa) bear witness to the injustices you have committed (in the province)," he said.

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

"Today we have surrendered Pakistan to IMF," Asif said.

"Echoes of the promises you made are still echoing in D-Chowk today," he added.

'Govt is clueless'

PPP's Raja Pervez Ashraf also spoke during the session to decry the government's introduction of the bill.

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

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

Ashraf 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.

Addressing the speaker, 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.

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 exempt from taxes.

Meanwhile, the GST 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 also 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.

Cabinet's nod

Prior to the start of the session, Minister for Information Fawad Chaudhry confirmed that the finance bill received the cabinet's nod and that it will now be tabled in the National Assembly.

'Govt not in dire straits'

Ahead of the presentation of the bill, termed by the Opposition as a "mini-budget", the prime minister assured reporters in Parliament that the government is "not in dire straits", despite the Opposition's attempts to make it seem that way.

Speaking to reporters in Parliament, ahead of the mini-budget presentation, the prime minister remarked "it is said every three months that the government is in a tough spot", denying that this was the case.

He went on to speak of former prime minister Nawaz Sharif, saying that it is claimed by the Opposition that the PML-N supremo is "coming (to Pakistan) today" or "coming tomorrow".

The premier reminded reporters that when Nawaz was in exile in Saudi Arabia, then too there was routine talk of his return but he "did not return without entering into a comprise".

PM Imran Khan, at one point, spoke of Nawaz's younger brother, Leader of the Opposition in the National Assembly Shahbaz Sharif, saying: "Shahbaz Sharif's speech is like a job application."

Meanwhile, Minister for Interior Sheikh Rasheed Ahmed, also speaking to reporters in parliament, remarked that the people will "only be burdened to the tune of Rs2 billion".

"Shaukat Tarin has said that a 17% tax will not be levied on the people, rather on only some items," said the minister.

He added that the allies "always stand by the government".