Senate body finalises budget proposals

Withdraws recommendation that seeks to limit govt’s right to present full-year budget

ISLAMABAD: The Senate, where the opposition enjoys a majority, on Wednesday implicitly accepted the government’s right to present the next fiscal year’s budget, as it withdrew a recommendation that sought to limit the PML-N government’s right to present the new budget to only four months.

The Senate unanimously adopted a report of the Senate Standing Committee on Finance on Finance Bill 2018 and the Annual Budget Statement for FY2018-19.

The standing committee had received 175 recommendations on the new budget that it discussed threadbare during past ten days.



Standing committee chairman Senator Farooq H Naek of the PPP presented the report in the upper house, which the Senate unanimously adopted. In case of the Finance Bill, the Senate recommendations are not binding but its report on the budget is seen as the voice of the house of the federation.

One of the recommendations was that the “Senate of Pakistan recommends to the National Assembly that it should advise the federal government to withdraw the budget and instead present a budget for only four months”.

The argument was that the government was going to end its term in May and it did not have the mandate to present the full year budget.

PPP Senator Khanzada Khan had recommended rejecting the budget. The standing committee had deferred the decision despite the majority of members present opposing Senator Khan’s proposal.

However, in the final report that the Senate adopted on Wednesday, the recommendation was listed as ‘withdrawn’.

This implied that the Senate, which represents the federation, did not have any objection to the presentation of the full-year budget by the outgoing government.

It is the first time that a government that was elected for five years will give six budgets, which Leader of the Opposition in the National Assembly Khursheed Shah called "an attempt to ‘usurp the right of the next parliament".

Opposition political parties have called the move "illegal and unconstitutional".

The Senate also approved the recommendation to enhance the income tax rates for the individuals earning more than Rs1.2 million annually.

The Senate has unanimously recommended the government to increase income tax rates for people earning from Rs1.2 million to Rs2.4 million annually to 10%.

The proposed increase is 100% more than the 5% rate the prime minister had suggested for the income group.

The Senate also recommended the government to increase income tax rates for people earning from Rs2.4 million to Rs4.8 million annually by 50%, taking it to an overall 15% of income.

The prime minister had announced a 10% rate for this income group. For people earning over Rs4.8 million annually, the standing committee recommended an income tax rate of 25% as against 15% proposed by the prime minister. This will increase the tax burden of this class by 66%.

The Senate also adopted a recommendation that sought to include grade 19 officers in a scheme that the government has announced to give monthly senior post allowance to officers of BS-20 and above. The government has allocated Rs5 billion in the budget to distribute among the bureaucrats in the next fiscal year.

The Senate also recommended that the federal government cut federal excise duty on domestic airline tickets by half to Rs1,800. The proposal is aimed at lowering overall airfares.

The Senate also recommended giving an income tax exemption on donations to the Al-Khidmat Foundation, which is affiliated with Jamaat-e-Islami.

The Senate also gave the recommendation to allow non-filers of income tax returns to buy up to 800cc cars as against the government’s proposal to disallow them from buying new and imported cars.



The standing committee on Tuesday decided to allow non-filers to buy cars up to 1000cc.

Similarly, the Senate recommended fixing the limit to buy residential property by non-filers to 125 square years as against the committee’s initial decision to allow non-filers to buy over 300 square yard property.

The government has proposed completely banning the purchase of property and cars by non-filers.

The Senate also approved the recommendation to stop the government from setting up a new Directorate General of Immovable Property of the FBR.

The government has proposed setting up a department to acquire private properties in cases where it deems think that the buyer has understated the value of the property at the time of its registration.

The Senate also endorsed a recommendation to stop the government from levying up to 3% tax on expenses incurred by Pakistanis who use credit or debit cards while abroad.