Major upset for govt: Senate panel rejects Tax Laws (Second) Amendment Bill

ISLAMABAD: In a major blow to the government, the Senate Standing Committee on Finance and Revenues on Wednesday rejected Tax Laws (Second), Amendment Bill, with a majority, declaring that it was not a money bill.

The members of the Senate panel took the stance that they were not ready to pass any piece of legislation under threat of Financial Action Task Force (FATF) because the Constitution is supreme to them.

The rejection of the bill has surfaced at a time when the FATF’s plenary meeting is scheduled to meet in Paris from Feb 16 to 21, 2020 for deciding either to remove the country from the grey list or keep it there for an extended period.

The Senate Standing Committee on Finance and Revenues met under Chairmanship of Senator Farooq H Naek here at the Parliament House on Wednesday in which the Chairman of Senate panel read out different clauses of the Constitution and cited different verdicts of the Supreme Court whereby the fines and penalties could not be declared as part of a money bill.

Senator Sherry Rehman severely criticized the way and manner in which the Tax Reform Amendment Bill was introduced and said that the treasury has made a joke out of the Parliament. How come the FBR is seeking powers to fire a bullet in disguise of the FATF conditions, she said while referring to proposed clauses to check smuggling. The Senate panel also felt insulted to find a junior draft legislative officer in the meeting, following which a senior advisor was summoned immediately. The advisor while giving the viewpoint of the Ministry of Law clarified that the fines and penalties could not be termed as part of the money bill. This strengthened the stance of the members of the committee, while the senior officials of the FBR continued to insist upon the senate panel that since they had cleared a similar bill six months ago so they should give a lenient view and pass this one also without objections.

Earlier, the Chairman of Senate panel Farooq H Naek started the proceedings of the meeting by objecting that the Advisor to PM on Finance and Secretary Finance had not bothered to appear before the committee at the time of passing of the crucial bill. He said that the government should bring this before the Senate as a separate bill as it could not be declared a money bill in the existing form. If a separate bill is introduced then they are prepared to pass it immediately. However, he left the decision to the other members of the committee to either pass or reject it in totality.

This followed a heated debate as the Chairperson FBR Nausheen Javed, FBR’s Member IR Policy Dr Hamid Ateeq and Member Customs Javed Ghani made all-out efforts to convince the members of the Upper House to pass it in the existing shape by arguing that the different clauses of the bill were aimed at improving regulations and enhancing the fines or penalties to align it with the FATF requirements.

It was interesting to watch Senator Ateeq Sheikh from MQM-Pakistan who strongly opposed the government’s move to present Tax Laws Second Amendment Bill, but voted in favor of the government by stating that being an ally of the government he could not vote against the legislation. However, the Senate panel rejected the bill in totality with three senators voting for rejection, while two senators including Leader of House senator Shibli Faraz and Senator Ateeq Sheikh voting in its favor.