Changing the rules: MQM complains farm tax not being taken seriously

Party’s senators propose amendment to take subject back from the provinces.

ISLAMABAD:

Legislators from the Muttahida Qaumi Movement complained on Wednesday that their constitutional amendments to allow the federal government to levy an agricultural income tax were being ignored by the ruling coalition, even as their own method for seeking such a change appears to violate the constitution.

Having consistently been told by the finance ministry that the agricultural income tax is a provincial subject according to the constitution, the MQM is seeking an amendment to the fundamental law that would allow a federal tax on farm income.

Senate Chairman Farooq Naek referred three bills to the Senate law and justice committee, including the one about the farm income tax. The law and justice division of the cabinet, however, has raised some serious concerns about the bill.

Senator Kazim Khan, chairman of the committee and a member of the ruling Pakistan Peoples Party pointed out the fact that, since it deals with the government’s money and taxation powers, the bill cannot originate in the Senate and must first pass the National Assembly by a two-thirds majority.

The senator also pointed out that the tax, under the 18th Amendment to the constitution, is a provincial subject. Senator Khan deferred a reading of the bill until the committee could hold further discussions with legal experts on how to proceed.

Yet legislators from the MQM insist that the government has other reasons for not supporting the bill, which they claim will raise up to Rs84 billion in annual revenues for the government. It is unclear where the MQM gets this estimate from, since an analysis conducted by the Federal Board of Revenue cites far lower figures.

“Agriculturalists must be brought into tax net to strengthen the national economy,” said Senator Tahir Mashhadi, the MQM legislator who moved the bill in the upper house of Parliament.

In its dogged insistence on levying a tax on agricultural income by any means necessary, the MQM appears to have an unexpected ally, the Jamaat-e-Islami, a party that is usually a rival for the MQM, particularly in the country’s financial capital of Karachi.

“The feudal elites of all political parties stand united and the proposed bill for tax on agricultural never saw the light of day for several years,” said Senator Muhammad Ibrahim Khan of the JI.

The finance ministry has insisted on several occasions that the agricultural income tax is not a federal subject and only serves as a distraction in its campaign to go after tax evaders that it has ordered the FBR to initiate.

Yet legislators from the MQM remain insistent on pursuing the issue. The MQM’s voters are largely based in urban areas, who would not be directly affected by the tax, whereas the PPP has largely rural constituency, and would be significantly affected by it.

Published in The Express Tribune, August 11^th, 2011.