NA passes budget as Pakistan inches towards IMF loan
ISLAMABAD – The National Assembly on Wednesday passed ‘the finance bill 2022-23’ with a majority of votes bringing the coalition government close to the revival of the IMF loan programme.
Unlike stiff resistance by the opposition during the passage of finance bills, the government got the federal budget 2023 approved in the assembly claiming that it aimed to tax the rich and give relief to the poor.
The government, in the finance bill, approved imposing a super tax between 1-4pc on the income of those earning between Rs150m to Rs300m. With majority of votes an amendment to back the relief provided to the salaried class was also approved.
Minister for Finance Minister Miftah Ismail had unveiled the budget for the coming fiscal year on June 10. In the initial version of the budget, having an outlay of Rs9.5 trillion.
In the approved federal budget 2023, a 10 per cent “super tax” on 13 large industries to raise an additional Rs465 billion in revenue. This move believed to reduce the budget deficit. These 13 industries to be taxed include cement, steel, sugar, oil and gas, fertilisers, LNG terminals, textile, banking, automobile, cigarettes, beverages, chemicals and airlines.
Minister of State for Finance and Revenue Aisha Ghous Pasha, narrating the clauses of budgetary measures, informed 80 per cent of the amendments were directly related to taxes. “Our aim is to tax the rich and to give relief to the poor,” she claimed.
The minister said that the coalition government was implementing the agreements the former PTI government had inked with the Fund.
About the imposition of levy on petroleum products, Finance Minister Miftah Ismail said that currently no levy had been imposed on petroleum products.
“The government has received permission from the house to impose a petroleum levy of Rs50/litre on petroleum products. At the moment, there is no consideration and hope of immediately going up to this figure,” he said.
The government has budgeted the total current expenditure at Rs8,694 billion for financial year 23, which is 15.5pc higher than last year’s budgeted figure. In the initial version of the budget, the total revenue stood at Rs9,004 billion. After subtracting provincial transfer of Rs4,100 billion as part of the National Finance Commission (NFC) Award, net revenue came out at Rs4,904 billion.
The NA also approved amendments for collecting sales tax from traders through electricity bills and imposing a 5pc tax on the services of IT and software consultants.
An amendment to take back the relief provided to the salaried class was also approved. Under the new rates, no tax will be imposed on those earning less than Rs0.6m per year. Meanwhile, those earning between Rs0.6m to Rs1.2m will have to pay a fixed tax of 2.5pc of the amount exceeding Rs0.6m.
n Approves 10pc super tax on 13 large industries n Allows govt to impose Rs50/litre levy on petroleum products n Sales tax to be collected from traders through electricity bills n 5pc tax imposed on services of IT and software consultants n 2.5pc tax slapped on annual income from 6 lakh n From Rs100-Rs16,000 imposed on mobile phones import
Those earning Rs1.2m to Rs2.4m will have to pay a fixed tax of Rs15,000 plus 12.5pc of the amount exceeding Rs1.2m. Where taxable income exceeds Rs2.4m but does not exceed Rs3.6m the tax rate is Rs136,000 plus 20pc of the amount exceeding Rs2.4m.
Those earning between Rs3.6m to Rs6m will have to pay Rs405,000 plus 25pc of the amount exceeding Rs3.6m. For income between Rs6m to 12m, the tax will be Rs1m plus 32.5pc of the amount exceeding Rs6m. Where taxable income exceeds Rs12m, the tax is Rs2.9m plus 35pc of the amount exceeding Rs12m.
Under the bill, a levy between Rs100-Rs16,000 was imposed on the import of mobile phones depending on its value. For mobile phones having a cost-and-freight (C&F) up to $30, it will be Rs100. For phones more than $30 and less than $100, it will be Rs200.
In the same way, for phones costing up to $200, it will be Rs600. For phones up to $350, it will be Rs1,800. For phones costing up to $500, the rate of levy will be Rs4,000. Meanwhile, for phones worth up to $700 it will be Rs8,000, while for phones more than $701 it will be Rs16,000.
Duty on the import of equipment for the film industry, including projectors, loud speakers and 3D glasses, was also abolished.
COALITION PARTNER MQM-P WALKOUT
With the onset of the proceedings, MQM-P strongly criticized the government and opted to walk out from the proceedings of the house. MQM-P Sabir Hussain Qaimkhani and Salahuddin said that they were elected over the votes of the people of their constituencies not by anyone other.
“We were elected on these seats with the power of votes. If we don’t even get respect after getting these seats, then we react in a same way,” said MQM-P’s MNA Sabir Hussain.
FINANCE MINISTER BLAMES IMRAN KHAN
Minister for Foreign Affairs Foreign Minister Bilawal Bhutto Zardari, on a point of order, said former Prime Minister Imran Khan wants the institutions to play a controversial role.
“Imran Khan is complaining about our institutions being neutral since undemocratic parties like his cannot win otherwise. This is why today, they are running a movement for our institutions to play a controversial role instead of a neutral and constitutional one,” he remarked.
He said, “Like Imran Khan, there are a few parties, politicians and puppets in Sindh who are helped and made to come forward in a dictatorial rule,” he said, adding the opposition benches in the last four years were not giving time to speak.
Regarding the local government elections in Sindh, Chairman Bilawal said that the PPP has been struggling for democracy, free and fair elections and the economic issues of the people for three generations and has been facing every tyrant.
“PPP’s Jiyalas stood bravely in the face of the dictatorship of Zia ul Haq, suffering hardships including violence, killings and the gallows. We have seen Zia ul Haq’s dictatorship and saved Pakistan from it,” he said.
Earlier, the house in a daylong sitting had completed the process of approving all 131 demands for grants of various ministries and divisions worth over Rs5.53 trillion.
The house rejected 266 cut motions submitted by opposition members, demanding a symbolic cut on allocations of eight ministries, including communications, energy, foreign affairs, interior, narcotics control and railways.