Rare criticism: Lawmaker’s taxing remark leaves government red-faced

PML-N MNA slams govt for introducing tax measures without parliamentary nod.

ISLAMABAD:

In a rare criticism, a lawmaker of the ruling Pakistan Muslim League-Nawaz (PML-N) on Tuesday accused his own party of making parliament ‘redundant’, as National Assembly’s Standing Committee on Finance unanimously recommended the government to respect supremacy of parliament.

The government had a tough day in the standing committee, despite it being dominated by its own MPs, over the issue of introducing new tax measures by bypassing parliament. As usual the government had left the job of mounting its defence to bureaucrats and Finance Minister Ishaq Dar did not appear to defend his actions.



Headed by Omar Ayub Khan of the PML-N, the standing committee recommended the government to bring all tax related matters in plenary of the National Assembly for approval or at least take the committee into confidence before notifying new measures.

“It is the collective wisdom of the committee that the government should take the standing committee into confidence beforehand,” said Omer Ayub while giving a ruling on the issue.

Pakistan People Party’s MNA Dr Nafisa Shah described the government’s tax moves as ‘extensive budget’ having no precedent in the parliamentary history of the country.

The government has so far introduced four mini-budgets in as many months. On March 1, the government raised the General Sales Tax rate on high speed diesel to 37%, which is 117% higher than the prevailing rate on the first day of this fiscal year.

“The government may have technical justification for levying taxes without parliament’s approval but it is sheer example of bad governance,” said Dr Shah. She said the government has undermined the spirit of parliamentary democracy.

The opposition parties have already boycotted the National Assembly session.

But the hardest blow came from Qaiser Ahmad Sheikh –who was elected from Chiniot, Punjab, on the PML-N ticket. Sheikh said the government has misused the powers of levying taxes through Statutory Regulatory Orders. He said these powers were only meant for emergency purposes but the government was frequently using them.

He said the act of ignoring the legislature has made the Parliament redundant.

Federal Board of Revenue (FBR) Chairman Tariq Bajwa said parliament has delegated powers to the government to levy taxes.

He said due to slump in global oil prices and slowing pace of inflation, the FBR was facing challenges in achieving its original tax collection target of Rs2.810 trillion. Bajwa said the tax target has been officially revised down to Rs2.691 trillion – a reduction of Rs119 billion.

The committee members also expressed their shock over the unpreparedness of the Finance Ministry in dealing with the critical issue of managing the books.

On the question whether the government will also revise the budget deficit target to adjust impact of downward revision in tax target, Finance Secretary Dr Waqar Masood said no such proposal was under discussion.

He said the question of revising the budget deficit target would arise in the last quarter of the current fiscal year, beginning from April. But the committee members were of the view that the ministry should have prepared the backup plan.

For the current fiscal year, the government has agreed with the IMF to restrict the budget deficit to 4.9% of Gross Domestic Product or Rs1.421 trillion. Dr Masood appeared optimistic that 4.9% deficit target would be achieved without slashing development spending but he could not convince the members.

FBR’s maladministration

Chairman standing committee sought detailed report from the FBR over allegations of inflating tax revenues by borrowing Rs50 billion from commercial banks. He asked case-wise details of tax demands and outstanding refunds of the banks.

Tariq Bajwa said going forward the FBR has decided that the banks’ refunds will be cleared within three months.

Published in The Express Tribune, March 4^th, 2015.