IMF condition met as NA passes mini-budget

ISLAMABAD: Amid thin presence of the members, the National Assembly Monday passed the Finance (Supplementary) Bill, 2023 proposing additional taxes and duties of Rs170 billion to meet the understanding reached with the IMF for the Extended Fund Facility.

None of the opposition members pointed out the lack of quorum in the House, as less than 70 lawmakers were present when the mini-budget was passed. According to the bill, the General Sales Tax will be increased from 17 percent to 18 percent, while it has also been decided to enhance the GST on luxury items from 17 percent to 25 percent. For air travel, it has been proposed that a fixed amount of Federal Excise Duty ranging from Rs250,000 to Rs75,000 of different tiers as per the International Air Transport Association on airfare for first, business and club classes should be imposed.

Besides, 10 percent withholding adjustable advance tax will be levied on the bills of wedding halls in order to promote simplicity and austerity. The Federal Excise Duty will be enhanced on sugary and aerated drinks, while FED will be increased on cement from Rs1.5 to Rs2 per kilogram.

Winding up discussion on the Finance (Supplementary) Bill, Finance Minister Ishaq Dar said the government was realising people’s problems due to rising inflation, but was compelled to take tough measures to strengthen the economy.

He said the government had allocated an additional amount of Rs40 billion for Benazir Income Support Programme raising 25 percent stipend of BISP beneficiaries. Regarding austerity measures, Ishaq Dar said Prime Minister Shehbaz Sharif will soon announce a comprehensive policy on floor of the National Assembly to reduce government expenditure.

He pointed out that inflation and price hike is a reality but the present government is not responsible for the same the previous regime reached IMF agreement on toughest terms but did not fulfil the commitment.

The House rejected all the amendments moved by the opposition. Jamaat-e-Islami (JI) member Maulana Abdul Akbar Chitrali categorically rejected the Finance (supplementary) Bill saying that revenue to be generated from additional taxation would not spent on people rather the same would repaid to the IMF.

He was of view that economic problems of the country would be resolved if leading politicians like Asif Zardari and Shehbaz Sharif deposited half of their assets in the national kitty.

The National Commission for Minorities Bill, 2023 was laid before the House. Earlier, the newly elected Member National Assembly Mahmood Baqi Moulvi took the oath of office. He was elected on PTI ticket on a seat vacated due to death of PTI MNA Dr Amir Liaquat.

Meanwhile, the House passed amendments to the Finance Supplementary Bill 2023 by majority vote under which the Federal Excise Duty (FED) on air travel for business and club class was fixed instead of the earlier rate of 20 percent or Rs50,000.

Minister for Finance Ishaq Dar tabled the amendments in the National Assembly which passed the bill with certain changes. The Senate Standing Committee also recommended that the FED rate be fixed keeping in view different destinations, otherwise it would create confusion.

Under tier-1 for Canada, North America and South America, there will be fixed FED rate of Rs250,000 on business and club class ticket. The overall rate of business or club class ticket hovers around Rs1.8 million to Rs2 million. For tier-II meant for Middle East and Africa, the ticket hovers around Rs0.5 million and there will be fixed FED of Rs75,000 on the air tickets of business and club class. For Tier-II for Europe, the ticket rate stands at around Rs0.8 to Rs1 million. The fixed FED rate will be charged at Rs150,000.

For tier-III for Far East, including Australia, New Zealand and Pacific Islands, there will be fixed FED rate of Rs150,000. Dar said the government-imposed 10 percent advance withholding tax on stick shares being traded outside the stock market. He said the government was making an amendment of technical nature to ensure that this tax was imposed on those shares which were not traded in the stock exchanges. Another amendment is related to cigarettes as it approved that with the imposition of increased FED rates, there would be no change in the brands of tier-1 and tier-II cigarettes.