Reformed GST: MQM links support to agriculture tax
The government’s trouble-shooter interior minister Rehman Malik and economic chief Abdul Hafeez Sheikh held marathon talks with senior leaders of the MQM at the Sindh Governor House on Wednesday that ran late into the night.
After the meeting, deputy convener of the MQM coordination committee Dr Farooq Sattar said that they have handed nine recommendations to the government on the Reformed GST. The ball is now in the government’s court, he added. Calling for levying of agriculture tax, Dr Sattar called for taxing the people who have never paid. He was referring to big landlords who own hundreds of acres of lands in the country, especially in Sindh and Punjab. If agriculture tax was not levied, it would show that the government was not interested in reforming the taxation system, he said.
On his part, Rehman Malik quashed rumors about a deadlock in talks, saying that the government agreed with the MQM proposal for levying agriculture tax. He added that the PPP leadership would discuss the proposals put forth by the MQM. And that another meeting was expected between the two sides within a couple of days.
However, earlier in Islamabad, both government allies and opposition parties attached dissenting notes to the unanimously passed GST Bill on Wednesday. This was done, say observers, in order to downplay public criticism on account of their dual stance on the issue.
In a hurriedly convened meeting of the senate standing committee on finance and revenue, coalition partners MQM and Awami National Party (ANP) and the opposition parties Pakistan Muslim League (PML), PML-Nawaz (PML-N) and Jamaat-e-Islmai (JI) gave their dissenting notes on the GST Bill.
“Despite the dissenting notes, the bill would still be considered unanimously recommended for approval,” said committee chairman Senator Ahmad Ali of MQM.
The committee accorded a unanimous recommendatory approval to the GST Bill 2010, aimed at broadening the tax base by withdrawing tax exemptions on over 600 goods, on Tuesday.
“The primary aim of today’s meeting was desperate face saving,” said an official of the Federal Board of Revenue, an opinion endorsed by the privatization minister, Senator Waqar Ahmad.
Senator Islam Uddin Shaikh, who chaired the Tuesday meeting in the absence of Senator Ali, said he had canceled the scheduled meeting for Wednesday, in consultation with the committee secretary, since he thought the business was over.
“I admitted my mistake in front of senate chairman,” said Senator Shaikh, providing an opportunity to the allies and the opposition for face saving.
Meanwhile, media representatives faced the brunt on Wednesday’s meeting, regarding their coverage of the proceedings.
“The media misreported the committee proceedings as we neither approved nor rejected the bill but only recommended to improve anomalies in it,” said Senator Khurshid Ahmed of JI.
However, Senator Haroon Khan of PML dissented, saying only three members had submitted recommendations which were discussed and, as a matter of fact, the committee had finished its business.
The chairman ruled that the report prepared by the committee would be considered provisional while the final report would be tabled in the senate on Thursday after taking into account the dissenting notes of all the parties.
Dissenting notes
Senator Ahmed attached a dissenting note on not levying tax on agriculture income through a presidential order for a period of three months. He opposed withdrawal of tax exemptions on domestic sales of garments, leather, textile, sports goods and pharmaceuticals.
PML-N’ s Senator Ishaq Dar said his party opposed the GST Bill on the ground that it alone would not help increase tax revenues. “For that, the government has to tackle corruption,” he added.
Senator Ilyas Bilour of ANP attached a dissenting note for not introducing a tax on agriculture and opposed the decision of doubling the special excise duty rate from 1 to 2 per cent.
Dirty games
Senator Ali accused the government of complicity in delaying his Islamabad-bound flight from Britain on Monday in an effort to stop him from attending the committee proceedings on the second day of the meeting.
“I have moved a privileged motion against the Pakistan International Airlines (PIA),” said Senator Ali. PIA officials told The Express Tribune that the plane developed a technical fault on Monday morning and by the time it was repaired, the crew’s flying time of eight hours was over. The plane took off for Islamabad on Tuesday morning.
Senator Ali revealed he received a call from a federal minister informing him that he would be escorted to his residence by security teams, upon his arrival in Islamabad. He was informed that he would not be allowed to attend the committee meeting until another federal minister, currently negotiating with the MQM in Karachi, returns to the capital. “I refused and that led to delay of PIA flight,” said Senator Ahmed. (With additional reporting by Shahbaz Rana in Islamabad)
Published in The Express Tribune, November 25th, 2010.
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