The National Assembly session to discuss the Finance Supplementary Bill (2023), also known as the mini-budget, was cancelled on Friday. It did not include a vote on tax amendments crucial for the revival of a dead International Monetary Fund (IMF), programme, and the averting of default threat.
The session was chaired by Raja Pervaiz Ashraf, who criticised the government’s decision to increase taxes and burden the poor.
As the government scrambled to meet the IMF’s conditions, Finance Minister Ishaq dar presented his bill in both chambers of parliament on Wednesday.
The IMF requested that the government raise additional tax revenue of Rs170 billion. The majority of tax measures in Rs115bn were already implemented by Statutory Regulation Orders (SROs) on February 14. The finance bill will propose measures to raise the remaining Rs55bn.
Qadir Khan Mandokhail, PPP, urged today’s session to reduce the burden on the poor by increasing taxes on luxury houses and cars.
MQM-P’s Salahuddin criticized Dar for not being serious about the country’s difficult circumstances. “If we are allies with you today it is to prevent default and lift this country out of its economic crisis.
“The rupee has fallen; petrol, electricity, and gas are already very expensive. These bombs were already dropped on the public. Then, on February 15, our finance minister dropped yet another bomb.”
Grand Democratic Alliance MNA Saira Bano also criticized the government for raising taxes. She claimed that inflation made it impossible for people to pay their essential needs.
Mohammad Afzal Khan Dhandla, PTI MNA, stressed the importance of agriculture and population control. He called for the strengthening of public transport and the reduction in car imports.
The finance bill also proposes increasing GST from 17pc to 25pc on 33 categories of goods covering 860 tariff lines — including high-end mobile phones, imported food, decoration items, and other luxury goods. However, this raise will be notified through another notification.
The finance bill raised the excise tax on cement from Rs1.5 to Rs2 a kilogram. This measure is expected to fetch an additional Rs6bn.
To raise additional Rs10bn, the excise tax on carbonated/aerated beverages has been increased to 20pc (previously 13pc).
On non-aerated drinks such as juices, mango, orange, and the like, a new excise tax of 10% was proposed To raise an additional Rs4bn tax
Additional Rs10 billion will be raised by the government through increased excise duty on club, first and business-class airline tickets. A tax rate of 20pc or Rs50,000 has been proposed on the air ticket value.
The government also proposes a 10 percent withholding tax for functions and gatherings held in wedding halls, marquees or hotels, restaurants, commercial yards, clubs, community areas, or any other place. This tax is expected to bring in Rs1bn-Rs2bn for the FBR.