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Lahore

June 28, 2016

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PA passes finance bill amid Opp protest

LAHORE

The Punjab Assembly on Monday passed The Punjab Finance Bill 2016 as introduced by Finance Minister Dr Ayesha Ghous Pasha thereby inaugurating the province’s new tax regime intended to finance expenditures made under the Annual Budget 2016-17. The Assembly in the session also passed the Punjab Local Government (Fourth Amendment) Bill 2016 with all amendments presented by the opposition rejected.

The schedule of authorised expenditure for the year 2016-17 was also laid in the House along with the Punjab Civil Courts (Amendment) Ordinance 2016. The Punjab Blood Transfusion Safety Bill 2016 and The Punjab Revenue Authority (Second Amendment) Bill 2016 was also introduced in the House and referred to the relevant standing committee.

The passage of the Finance Bill however faced initial difficulties in its consideration and passage. Shortly after the finance minister moved for the Finance Bill 2016 to be introduced in the Assembly, the Leader of the Opposition and PTI MPA Mian Mehmood-ur-Rasheed opposed the consideration by citing Clause 98 of the Punjab Assembly Rules and Procedure. The Clause according to text states if the member-in-charge moves that the Bill be taken into consideration, any member may move an amendment that the Bill be referred to a Select Committee or be circulated for the purpose of eliciting opinion thereon by a date to be specified in the motion. Based on the motion, which was faced by initial disagreement by the confused PA Speaker, members of the opposition voiced their grievances on the high burden of indirect taxes distressing the general public as contained in the bill.

Mehmood-ur-Rasheed criticised the government for applying a new tax on any vacant plot of 5 marlas and more after a period of two years since purchase by stating that this would crush any poor man collecting his savings to build a house for him and his family. Taxes placed on marriage halls and wedding services providers would be transferred to the ordinary person in terms of higher prices, the Opposition leader added. In addition, taxes on rickshaws and small motorcycles would hurt the average person whereas owners of luxury and imported cars had to pay a small amount in taxes for their expensive vehicles. The Opposition leader stated that there was no source of relief for those impoverished in the newly-introduced Finance Bill and the government had defaulted on its promises that more efforts would be made to broaden the tax net instead of levying new taxes on an already economically strapped public.

PTI MPA Shunila Ruth added to the criticism of the Finance Bill stating that the burden of indirect taxes was too high and that the new tax regime was regressive in its nature disadvantaging the lower classes the most. She said the issue of double taxation was apparent when both the federal and provincial governments had decided to charge altogether 43 percent altogether in sales taxes. She expressed her disappointment over no tax exemption for welfare organisations, including Edhi Trust and Shaukat Khanum in the new bill. She informed that the Punjab Revenue Authority was not transparent in its tax collection process and was functioning this without an appointed board of governors as pointed out in a judgment given by Lahore High Court Justice Syed Mansoor Ali Shah. The PTI MPA recommended that the House exercise discretionary powers on the imposition of taxes instead of being kept in the dark until the presentation of the bill. MPA Mian Aslam Iqbal also joined the chorus of criticism. He cited the Auditor General’s report for the year 2014-15 which mentioned the government’s failure to collect property and commercial taxes on businesses. His counterpart, PTI MPA Dr Nausheen Hamid added that Pakistan was one of the most heavily taxed countries in the continent and indirect taxes formed the majority of these taxes. 

Meanwhile, PPP MPA Qazi Ahmed Saeed said taxes should be levied according to payer’s ability to pay. The finance minister concluded the discussion by dismissing claims that the budget was regressive in nature and justified the tax on vacant plots which was an effort to end the practice of land speculation that brought in unearned profits and owners of rickshaws and motorcycles had the option of making lifetime lump sum payment to ease the tax burden. She stated that under the new Finance Bill, incentives were being created to increase payment of taxes in addition to taxing under-taxed sectors and to facilitate tax payers. She noted that Punjab was leading in tax collection amongst the four provinces and was 30 percent more than collected in the previous year.

Opposition’s attempts to halt the passage of the Punjab Local Government (Fourth Amendment) Bill 2016 were meanwhile thwarted as all four amendments proposed were rejected. The Bill’s amendment to the 2013 Local Government Act laying down that if a metropolitan corporation, a municipal corporation, a municipal committee or a rural Union Council with urban characteristics has not determined the rate of property tax within its area, the property tax shall be levied in accordance with the provisions of the Punjab Urban Immovable Property Tax Act 1958 was accepted.

The session will resume today (Tuesday).

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