ISLAMABAD– The National Assembly on Thursday passed the State Bank of Pakistan (Amendment) Bill 2021 and supplementary finance bill, termed by the Opposition as a “mini-budget”, with a majority vote giving effect to new tax measures in an ambitious bid to achieve a tax target of Rs5.8 trillion as per the requirement of the International Monetary Fund (IMF).
The approval of the supplementary finance bill was necessary to ensure Pakistan’s sixth review of the $6 billion Extended Fund Facility (EFE) gets cleared by the IMF’s Executive Board which is scheduled to meet later this month to decide the disbursement of the $1-billion tranche.
Days after Federal Minister for Finance Shaukat Tarin introduced two bills in the assembly to give effect to the Rs343 billion mini-budget and granted autonomy to the central bank, the NA approved the finance bill amid a ruckus created by the Opposition during a prolonged session.
It is pertinent to mention here that on Tuesday, the NA had formally begun a general debate on the mini-budget which saw the coalition partners in the ruling alliance under the PTI joining their voices with the Opposition over possible implications of the new taxation measures.
In the amended bill, the government rolled back its plan to impose additional sales taxes on children’s formula milk, bread, and small cars. It also withdrew the proposal to impose taxes on laptops and computers.
Changes to the bill
The government’s amendments to the proposed bill were approved by the NA. The changes include:
- No general sales tax will be imposed on a 200-gram carton of milk.
- A 17% GST will be imposed on formula milk worth Rs500.
- Tax on imported vehicles has been increased from 5% to 12.5%.
- The federal excise duty on all imported vehicles will remain unchanged.
- A 2.5% duty will be charged on locally manufactured 1,300 cc vehicles, which was previously around 5%.
- Duty on locally manufactured 1,300 to 2,000cc cars also reduced to 5% from 10%.
- A 10% duty will be imposed on locally manufactured cars greater than 2,100 cc.
- No sales tax will be imposed on iodised salt and red chillies.
Proceedings of the session
The Opposition’s amendments to the bill were rejected and when the voting took place, 150 members voted in favour of the amendments, while 168 voted against them.
By this measure, the government had an edge with 18 parliamentarians to get the bill passed.
The National Assembly comprises 342 lawmakers, of which the government has 182 MNAs, while the Opposition has 160 MNAs.
In today’s session, 14 of the government’s lawmakers were absent, while 10 from the Opposition’s side didn’t show up.
‘We had no option other than going to IMF’
Shedding light on the criticism regarding the supplementary bill being the “IMF bill”, Tarin said that during the previous government’s tenure, 13 agreements were signed with the Fund.
“They [the Opposition] are saying that IMF has destroyed the economy of Pakistan, while they went to the IMF in their tenures as well,” he said.
Tarin further said that the PTI government is being accused of “mortgaging country’s sovereignty”; however, the government was forced to approach the IMF.
“We had no other option but to ask for IMF’s help,” he reiterated.
SOURCE: GEO NEWS
