ISLAMABAD: National Assembly Friday passed the federal budget approving thefinance bill 2019-20 to give effect to the financial proposals of thegovernment.
The total outlay of the budget was Rs7.022 trillion, focusing on fiscalconsolidation, revenue mobilization, austerity measures and protection tothe vulnerable segments of society.
At the start of the proceedings, Minister of State for Revenue and FinanceHammad Azhar moved the motion to present the finance bill before the housefor consideration and voting.
After voice voting on the motion to introduce the bill, the oppositionchallenged the vote and asked the Speaker for a head count.
One hundred and seventy six (176) members of treasury benches favoured themotion while 146 members of opposition opposed it. After passage of themotion with majority vote, Minister for Revenue introduced the finance billwhich was passed by the house with a majority of votes.
Members of National Assembly Shahida Rehmani, Abdul Qadir Patel, ShahidKhaqan Abbasi, Khawaja Asif, Shazia Marri, Marriyum Aurangzeb, MaulanaAbdul Akbar Chitrali, Shehbaz Sharif, Rana Sanaullah, Qaiser Ahmed Sheikh,Sardar Ayaz Sadiq, Shagufta Jumani, Dr Nafeesa Shah, Syed Naveed Qamar, AliPervaiz, Shahida Akhtar Ali and others moved amendments in the finance bill.
The amendments were related to changes in tax rates and finance bill, taxexemptions and abolition of interest on bonds
While debating the amendments, Shahida Rehmani said the tax collected fromIslamabad should be spent on the city for provision of drinking water andother basic facilities.
She suggested changes in the income tax ordinance to benefit overseasPakistanis who buy property abroad.
Abdul Akbar Chitrali said taxes on those providing professional serviceswould burden consumers so it should be withdrawn.
He said taxes on essential food items should be brought down.
She along with Shazia Marri and Mehreen Razaq Bhutto seconded the demand ofChitrali to reduce taxes on food items including sugar and juices andconstruction material like cement and steel.
Nisar Ahmed Cheema and Chitrali sought tax relief for Non Governmentalorganizations (NGOs) including Al Khidmat Foundation and Rawalpindi EyeDonors Organization (REDO).
Ali Pervaiz and Shagufta Jumani demanded that the tax relief given by thePakistan Muslim League(N) government to the salaried class in its last yearshould be restored.
Jumani said the consumers were paying sales tax on every item they purchasefrom the market.
Abdul Qadir Patel asked for tax exemption for teachers and researcherswhile Qaiser Ahmed Sheikh said tax should be reduced for cottage industryas the banks were not giving it loans.
He wanted removal of federal excise duty on edible oil and lower taxes onlocal Liquefied Natural Gas and smaller cars.
Shazia Marri said she wanted concessions for Thar coal as was decided in ameeting of Economic Coordination Committee (ECC) in 2010.
The Thar coal electricity projects should be exempted from taxes. The taxeswould increase cost of coal production that in turn would increase powerrates, she noted.
Dr Nafisa Shah proposed amendment in the income tax ordinance 2001 sayingdelay in tax refunds blocked investment and it was unconstitutional to askexporters to take bonds instead of refunds
The treasury benches rejected almost all the amendments to the finance billmoved by the opposition members after discussion on them by both sides.
While amendments moved by Minister for Finance and Revenue were adopted bythe house.
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Prime Minister Imran Khan along with federal ministers of PTI and alliedparties sat through the session spread over many hours while opposition ledby Shehbaz Sharif and Bilawal Bhutto Zardari attended the session with fullstrength.
During the voting, Speaker NA Asad Qaiser on various occasions urged themembers to refrain from raising slogans, observe decorum of the house anddesist from making videos from their mobile phones.
At times, the members from across the aisle squabbled over rules accordingto which the Speaker runs the house.
Minister of State for Revenue Hammad Azhar said due to economic hitmanshipof the previous two governments, the country’s economy went down to deepcrisis.
“During tenure of previous government, Public Sector Entities’ lossessurged from Rs 123 billion to over Rs 500 billion, gas sector lossesincreased to Rs 150 billion, exports declined by $1.5 billion, and increaseof only two percent tax to GDP ratio was recorded in previous 10 years,” hesaid while speaking in National Assembly.
Hammad Azhar said due to prudent policies of the incumbent government tradedeficit plunged by over $4 billion, and although in term of value, theexports remained stagnant during the year 2018-19 but in term of volume,readymade garments’ exports only witnessed an increase of 30%.
He said the government has targeted that tax to GDP ratio would beincreased by 4% within three years. The minister of state said debt to GDPratio which kept on increasing during previous 10 years would come down forthe first time in country.
He dispelled the impression that the government had imposed new taxes onfood items saying that new taxes were imposed only on processed food,fruits, meat and vegetables which were only consumed by the rich.
Hammad explained that no new tax on ghee and wheat flour was imposed butinstead it had adjusted some taxes in different heads which apparentlygives the impression that sales tax on ghee had been increased fromexisting 16% to 17%. With respect to tax on sugar, he said the oppositionmembers were creating misperception that additional tax of Rs 20 per kg ofthe commodity had been imposed which was wrong.
“The government has imposed only Rs 3.5 per kg tax on sugar,” he saidadding that if the government had not levied this tax on the commodity, theopposition would have created mess that the government was favoring thesugar mills owners. Explaining the new taxes being imposed on the salariedclass, he said during previous two governments, an amount of Rs 5000 incometax was being paid by the person who was taking a salary of Rs 100,000whereas this government had fixed a tax of only Rs 2500 on income of Rs100,000.
He clarified that in the upcoming budget, new taxes were imposed only forrich and lower income people would not be affected by the budget. He saidthe government would continue taking actions against gas and electricitytheft in the country.
He said Minister for Power Omar Ayub had done a great job by ensuringadditional revenues of Rs 82 billion in power sector. Meanwhile respondingto amendments proposed by the opposition members, Hammad Azhar said ifsomeone wanted that Alkhidmat foundation and Rawalpindi eye donors shouldbe given tax free status, an application should be filed with FBR in thisregard.
He said this needed a process and could not be amended in a single day asthere were already some clauses of Financial Action Task Force (FATF) onsome NGOs and some of them were also caught in financing terrorism.Moreover, he said refunds could not be issued within 30 days as it neededdue diligence after verification of documents, however he said the refundprocess would be made speedy as much as possible.
With respect to Shazia Marri’s call for amending a clause to exempt Tharcoal power plant from tax on dividends, Hammad said all IPPs were uniformlytreated in taxation structure, however he said if she wanted a separatepreferential taxation system for the project, she should provide all therequired documents after the budget, then the government would seriouslyconsider the request.
He said refund scheme through bonds was only a sales tax scheme forexporters and it did not apply on the common people.
“Even for exporters it is a voluntary scheme and not bound to them to getthe bonds,” he said adding this scheme was helpful for those who wantedimmediate clearance on pending refunds which were stuck up for 4-5 years.
He said this was not unconstitutional as this practice was being utilizedin all over the word, and securitization on government debts and governmentrefunds was a normal routine all over the world.
He explained that previous government had also announced to extend thisfacility but it could not finalized the scheme.
“But we have done it and already issued bonds of Rs 7 billion and a totalof Rs 45 billion refunds would be issued under this scheme.
