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Govt wins mini-budget approval in NA

Government rolls back plan to impose sales tax on formula milk, bread and small cars

The National Assembly (NA) on Thursday passed the controversial Finance (Supplementary) Bill 2021 or the mini-budget as termed by the opposition and the State Bank of Pakistan (Amendment) Bill 2021 with a majority vote during an hours-long session amid fierce objection from the opposition benches.

The finance bill and the SBP bill are necessary to ensure that Pakistan’s sixth review of the $6 billion Extended Fund Facility gets cleared by the International Monetary Fund’s (IMF) executive board.

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The session, which began shortly after 4pm, resumed under the chairmanship of NA Speaker Asad Qaiser. Prime Minister Imran Khan, Planning and Development Minister Asad Umar and Foreign Minister Shah Mahmood Qureshi were also in attendance.

The government’s amendments to the proposed bill were approved by the NA. In addition, amendments to the finance bill were also moved by Muttahida Qaumi Movement (MQM) MNA Kishwar Zahra to which the finance minister replied that most of the demands had been accommodated. In response, the MNA thanked the premier and the foreign minister and withdrew the amendments.

In the amended bill, the government rolled back its plan to impose additional sales tax on children’s formula milk, bread, and small cars. It also withdrew the proposal to impose taxes on laptops and computers.

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A sales tax of 8.5 per cent will be imposed on 1,800 cc domestic and hybrid and domestic cars. A tax of 12.75pc will be imposed on 1,801 to 2,500 cc hybrid vehicles while imported electric vehicles will be taxed at 12.5pc.

There will be a duty of 2.5pc on locally manufactured 1,300 cc vehicles, down from the 5pc proposed earlier. The duty on locally manufactured 1,300 to 2,000 cc cars was also reduced to 5pc from 10pc. A 10pc duty will be imposed on locally manufactured cars greater than 2,100 cc.

The government’s amendments to clauses 5 and 6 were also approved during the session. Shortly after the session began, Pakistan People’s Party (PPP)’s Shazia Marri moved a motion recommending that the finance bill be circulated for public opinion under Rule 124 of Procedure and Conduct of Business in the National Assembly so that it could be proven how “anti-people” it was.

However, the motion was opposed by Finance Minister Shaukat Tarin.

The opposition lawmakers also called for holding a debate on the recommendations put forth by the Senate. Ahsan Iqbal of the Pakistan Muslim League-Nawaz (PML-N) said that the recommendations put forth by the Senate regarding the mini-budget had not been discussed and termed it an insult to the Upper House of parliament.

Voting also took place on several amendments moved by the opposition to the finance bill that were subsequently rejected through a voice vote. The opposition demanded that a physical count be conducted for some of the amendments tabled by the opposition, including those by Mohsin Dawar and PML-N’s Shahid Khaqan Abbasi. However, the NA speaker refused under Rule 29 of Procedure and Conduct of Business in the National Assembly.

A physical count was later conducted on the amendments moved by PPP’s Marri, with 168 lawmakers against it and 150 in favour of it.

Later, a physical count was conducted for a second time. The government was once again in majority and the amendments were rejected. The opposition’s amendments to clause 3 of the finance bill were rejected with 163 votes against it and 143 in favour.

Earlier this week, the Senate approved the recommendations on the Finance (Supplementary) Bill 2021.

Presenting the final report related to the bill, Standing Committee on Finance Chairman Senator Muhammad Talha Mahmood had highlighted that the Opposition did not raise any objections to the bill.

Terming the “mini-budget” an “IMF budget”, Mahmood said that the supplementary finance bill will bring a tsunami of inflation in the country.

He added that this is not just an Rs343 billion budget it is far more than that, adding that the finance bill will have a “negative impact on the common man. On December 30, Shaukat Tarin presented the much-awaited supplementary finance bill – termed by the Opposition as a “mini-budget” – in the National Assembly.

According to the finance ministry’s proposal, the government will impose a tax on approximately 150 goods at a rate of 17 per cent. Therefore, goods that were currently either completely exempt from General Sales Tax (GST) or being taxed at 5 per cent to 12 per cent would now be taxed at 17 per cent.


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