Mini-budget: Dar seeks to allay fears over new taxes

Opposition stages walkout from the house over presidential ordinance

ISLAMABAD:

Finance Minister Ishaq Dar on Monday defended the Rs40 billion mini-budget announced last week, clarifying to federal lawmakers that new taxes would be levied only on imported, non-essential items. And this would not add in any way to the economic burden of the common man.

“If these taxes are not levied, the provinces will suffer a financial hit of Rs27 billion, while the federal development budget has to bear a significant cut,” Dar said in a policy statement on the floor of the National Assembly in a session marred by the opposition’s walkout against a presidential ordinance. “We are levying the new taxes in good faith and only on imported luxury items.”

The minister also debunked allegations levelled by the opposition that the new taxes have been imposed on the dictation of the International Monetary Fund (IMF) to secure the next tranche of a multibillion-dollar bailout package. “We are in a state of war and we should keep politics away from the economy,” he urged the opposition.  “The new taxes are inevitable as we are facing a negative impact of international commodity price recession.”

He said that the finance ministry pored over the new tax proposals for around three weeks before making a decision. “Still we are open to suggestions from the opposition,” he added. He cited different laws, rules and regulations to justify the news taxes. “We are not doing anything illegal,” he added.

Dar claimed that the ailing national economy was rapidly improving as tax collections have jumped from Rs1944billion to Rs2588 billion in the first two years since the PML-N government took over. “The tax-to-GDP ratio has increased from 8% to 11% in the last two years,” he added.

About a presidential ordinance that has removed a key hurdle to the privitisation of the national flag carrier, he said PIA has been turned into a corporate entity and “now it can take its own decisions without bureaucratic hurdles”. Although PIA’s losses have ballooned to Rs300 billion, the government doesn’t plan to sell it out, he added. “We are trying to restructure PIA with the help of a strategic partner to improve its performance.”

The minister said that according to the presidential decree all assets and liabilities of PIA have automatically transferred to the corporation. He promised that the rights of PIA employees would be safeguarded. To clear the ‘misunderstandings’ of the opposition, Dar agreed to a proposal that Speaker Ayaz Sadiq form a committee comprising members from all opposition parties to address their objections.

Earlier, Leader of the Opposition Khursheed Shah bemoaned that the ordinance was promulgated a day before the lower house of parliament convened for a new session. Calling for all matters to be discussed in parliament, Shah said the PPP was not in favour of ordinances or privatisation of state-owned entities.

Shah’s was backed by all opposition parties who unanimously criticised the presidential ordinance. PTI‘s Shah Mehmood Qureshi, Awami Muslim League’s Sheikh Rashid, Jamaat-e-Islami’s Shahibzada Tariquallh, MQM’s Sufiyan Yusuf, ANP’s Ghulam Ahmed Bilour and Shah Gul Afridi spoke against the ordinance and demanded its withdrawal. They called for the matter to be brought before the Council of Common Interests and parliament.

Vowing to continue their protest on the subject till the law is reversed, opposition parties, excluding MNAs from FATA, walked out of the assembly hall.

Bills passed

The National Assembly also passed three bills on Monday including the Pakistan Halal Authority Bill 2015, Publication of Laws of Pakistan Bill 2015 and Patents (Amendment) Bill 2015.

Separately during the question hour, Adviser to the Prime Minister on Foreign Affairs Sartaj Aziz informed the house that a total 33 non-diplomatic visas had been issued to the US Embassy and consulate staff since 2013.

The visas had been issued to technicians and workers for a period of three months who left the country after completing their work at the embassy or consulates, he added.


Published in The Express Tribune, December 8^th, 2015.