Gas consumers: Senate panel objects to infrastructure levy
Says it is an extreme step which can be blocked by the Supreme Court.
ISLAMABAD:
Desperate attempts on the part of the government to collect Rs40 billion annually through a new tax on gas consumers seemed to be fizzling out on Tuesday when a parliamentary panel moved to block passage of the bill in its existing form which undermines constitutional powers of the Senate and provinces.
The Senate Standing Committee on Finance raised two major objections against the Infrastructure Development Cess Act 2011 through which the government wants to impose the cess on all gas consumers. The government claims that the money is required to build infrastructure for import of gas in order to meet the supply and demand gap.
The committee meeting was adjourned soon after it started and most of the discussions took place informally.
“The government wants to get the legislation passed as a money bill despite knowing that this is an ordinary piece of legislation,” said Senator Ahmad Ali, the committee chairman. Under the Constitution, the Senate can only give recommendations on a money bill against the normal piece of legislation on which it can vote.
After the meeting, Ali said the government was trying to take an extreme step despite knowing that the Supreme Court of Pakistan has struck down two legislations that were passed from parliament as money bills but were actually routine matters. The SC had rejected the appointments of judges of the apex court and National Bank president Syed Ali Raza on the grounds that these were not money matters.
He said the National Assembly speaker has the right to declare a piece of legislation as a money bill but the SC judgments should be kept in mind. Under the Constitution, the Senate panel can give recommendations on a money bill within 14 working days.
“The bill will have serious repercussions for the public and it should not be passed in haste,” said Senator Safdar Abbasi of the PPP.
Ahmad Ali said the government has not even prescribed the cess rate and wants an open-ended blanket approval from parliament. According to the petroleum ministry, a minimum of Rs40 billion can be collected annually from the cess.
Petroleum Minister Dr Asim Hussain did not comment on the development and only said the government would give its version on Thursday, when the committee would thoroughly discuss the bill.
An official of the law ministry said the ministry has already vetted the bill as a money bill and the finance ministry also supported it.
Another committee member said there is a possibility that the panel can send back the bill to the government, asking it to reintroduce the bill as a normal bill.
In another major objection, Ahmad Ali said under the Constitution only provincial governments can levy all types of cess. At a time, when people are agitating and political temperature is rising, the government’s attempt to make gas expensive may create some serious problems, he said.
According to the finance ministry, the gap between gas supply and demand will soar to 1.6 billion cubic feet per day in upcoming winter, which will peak to 3.6 billion cubic feet in 2016-17, the year when first gas flows are expected from the $7.6 billion Turkmenistan, Afghanistan, Pakistan and India (TAPI) pipeline.
However, it said neither the government nor the gas companies have funds to lay infrastructure for import of gas, which may force them to import costlier liquid fuels.
While the ministry claims that it does not have finances for laying infrastructure for Iran-Pakistan and TAPI gas pipelines, it has doled out Rs1,000 billion in power subsidies over the last three and a half years.
Published in The Express Tribune, November 2nd, 2011.
Desperate attempts on the part of the government to collect Rs40 billion annually through a new tax on gas consumers seemed to be fizzling out on Tuesday when a parliamentary panel moved to block passage of the bill in its existing form which undermines constitutional powers of the Senate and provinces.
The Senate Standing Committee on Finance raised two major objections against the Infrastructure Development Cess Act 2011 through which the government wants to impose the cess on all gas consumers. The government claims that the money is required to build infrastructure for import of gas in order to meet the supply and demand gap.
The committee meeting was adjourned soon after it started and most of the discussions took place informally.
“The government wants to get the legislation passed as a money bill despite knowing that this is an ordinary piece of legislation,” said Senator Ahmad Ali, the committee chairman. Under the Constitution, the Senate can only give recommendations on a money bill against the normal piece of legislation on which it can vote.
After the meeting, Ali said the government was trying to take an extreme step despite knowing that the Supreme Court of Pakistan has struck down two legislations that were passed from parliament as money bills but were actually routine matters. The SC had rejected the appointments of judges of the apex court and National Bank president Syed Ali Raza on the grounds that these were not money matters.
He said the National Assembly speaker has the right to declare a piece of legislation as a money bill but the SC judgments should be kept in mind. Under the Constitution, the Senate panel can give recommendations on a money bill within 14 working days.
“The bill will have serious repercussions for the public and it should not be passed in haste,” said Senator Safdar Abbasi of the PPP.
Ahmad Ali said the government has not even prescribed the cess rate and wants an open-ended blanket approval from parliament. According to the petroleum ministry, a minimum of Rs40 billion can be collected annually from the cess.
Petroleum Minister Dr Asim Hussain did not comment on the development and only said the government would give its version on Thursday, when the committee would thoroughly discuss the bill.
An official of the law ministry said the ministry has already vetted the bill as a money bill and the finance ministry also supported it.
Another committee member said there is a possibility that the panel can send back the bill to the government, asking it to reintroduce the bill as a normal bill.
In another major objection, Ahmad Ali said under the Constitution only provincial governments can levy all types of cess. At a time, when people are agitating and political temperature is rising, the government’s attempt to make gas expensive may create some serious problems, he said.
According to the finance ministry, the gap between gas supply and demand will soar to 1.6 billion cubic feet per day in upcoming winter, which will peak to 3.6 billion cubic feet in 2016-17, the year when first gas flows are expected from the $7.6 billion Turkmenistan, Afghanistan, Pakistan and India (TAPI) pipeline.
However, it said neither the government nor the gas companies have funds to lay infrastructure for import of gas, which may force them to import costlier liquid fuels.
While the ministry claims that it does not have finances for laying infrastructure for Iran-Pakistan and TAPI gas pipelines, it has doled out Rs1,000 billion in power subsidies over the last three and a half years.
Published in The Express Tribune, November 2nd, 2011.