Fifteen days after the Pakistan Muslim League-Nawaz government presented its first budget for fiscal 2013-2014, the National Assembly approved it with a majority, which also includes the controversial and unpopular decision to increase general sales tax.
The lower house of Parliament session on Thursday also witnessed every single objection of the opposition to the Finance Bill 2013-14 being dismissed.
The total size of the budget which takes effect from July 1 is Rs3.59 trillion, including Rs207 billion in new taxes as the house passed several amendments in the earlier version of the finance bill tabled in the lower house.
Though amendments proposed by the opposition were dropped, the PML-N government incorporated recommendations of the Senate in the bill.
The government inserted a new clause in the finance bill (amendment in ordinance XXII of 2001) which exempts “…expenditures of secret service agencies certified by the federal government as relating to national security from the scope of audit.”
Earlier, the PML-N government had abolished secret funds of 34 institutions and departments, except secret agencies.
In addition, the supplementary budget of Rs1.4 trillion for the outgoing fiscal year that the previous Pakistan Peoples Party-led government spent over and above the approved budget of the year closing on June 30 was also passed. The huge supplementary budget highlights the economic mismanagement of the PPP administration that doled out public funds to win voters.
In his windup speech, Finance Minister Ishaq Dar turned down the opposition’s objection on the imposition of 1% increase in general sales tax from the next financial year, arguing the measure was necessary to supplement revenue generations that he feared would plunge below Rs2 trillion.
“We have restricted ourselves to the judgment of the Supreme Court,” Dar said, adding the government had withdrawn the GST on June 22 a day after the judgment of the court.
The finance minister reacted angrily at former finance minister Syed Naveed Qamar’s remarks against imposing the tax through the Act of 1931.
“Qamar himself had been imposing tax through this act and he should at least tell the truth,” Dar thundered.
He justified the amendment through which sales tax would be collected with retrospective effect from June 13, saying had this step not been taken by the government the funds already collected could have lapsed.
But Shah Mahmood Qureshi of Pakistan Tehreek-e-Insaf said the imposition of GST from June 13 was unconstitutional and the apex court endorsed the opposition’s stance in its decision.
Besides that, Dar also responded to every single objection raised by the opposition Members of the National Assembly and clarified that perks and privileges of the NA speakers and the Senate chairmen as well as the members were being adjusted to the same level as they were prior to the amendment in 2010 of the Salaries, Allowances and Privileges Act 1975.
“We are going to the same old position and there should be no confusion. We need to set good examples. At least the people should feel that we are not getting extra benefit on their hard earned tax money,” he added.
He said the salaries, allowances and privileges of Senate chairmen and NA speakers were increased through an amendment in 2010 and “we brought the relevant Act to its original shape.”
“The 2010 amendment was irrelevant, therefore, our spirit should be appreciated that we brought the act back to its original shape,” Dar explained.
“Chairman and NA speaker [being chairperson of their receptive finance committees] take decisions for their own future. We will rectify every wrong amendment as no one has the right to be a judge in his own case,” Dar stated.
The PPP government in 2010 had amended the Salaries, Allowances and Privileges Act 1975, granting permission to the Senate chair and NA speaker to determine privileges.
The finance committees of both houses under the amendment had representation of all parties represented in Parliament.
Former speaker Dr Fehmida Mirza explained to The Express Tribune that she never asked for any extra privileges for herself, rather she curtailed the privileges proposed by the Senate’s finance committee.
She said that a misconception had been created that she got some special privileges approved for herself, which was not true.
In the finance committee of the last National Assembly, there were around 21 members and more than half of them were from opposition parties who took the decision. She said since the speakers remain members of many prestigious international bodies, the finance committee had approved one 17-grade official, one LDC and a peon to assist them.
Responding to opposition criticism that the government was presenting a mini-budget, as it included several amendments, Dar said, “The change is because we acted upon your good proposals and there is nothing unusual about that.”
He urged the members of the assembly not to indulge in politicking, saying “The government will not be able to address the economic mess [otherwise]. We will try our level best to meet the tax collection target and for that matter we will root out corruption and leakages.”
The government’s top economic wizard also clarified that no new tax was imposed on Hajis (pilgrims).
He also clarified that the number of kitchen items are already exempted from tax to facilitate the poor in the country.
SA Iqbal Qadri from the Muttahida Quami Movement opposed retrospective amendments for tax collection and defined it as an “injustice to the poor people”.
Published in The Express Tribune, June 28th, 2013.