‘Mini-budget’ lands in Parliament

Finance Minister Ishaq Dar on Wednesday tabled Finance (Supplementary) Bill 2023 dubbed as “mini-budget” in the National Assembly and Senate in order to meet the conditions set by the International Monetary Fund (IMF) for the revival of the derailed $6.5 billion programme. The government through the supplementary bill has proposed to raise the goods and services tax to 18% from 17% as part of efforts to raise 170 billion rupees ($639 million) in extra revenue during the current fiscal year ending July. The bill also proposed to raise taxes on luxury items, first and business class air travel, cigarettes among other things. The GST on luxury items was proposed to increase from 17pc to 25pc. On first class and business class air tickets, federal excise duty (FED) of 20% of the airfare or Rs50,000, whichever is higher is proposed, while 10% withholding adjustable advance tax on the bills of wedding halls, increase in FED on cigarettes, and aerated and sugary drinks, and increase in FED on cement from Rs1.5/kg to Rs2/kg was also proposed. Addressing the lower house of parliament, Dar compared the performance of the previous PML-N and PTI governments. He said that during former prime minister Nawaz Sharif’s tenure, the GDP per capita increased while the Pakistan Stock Exchange’s (PSX) market capitalisation was $100 billion. However, the PSX’s market capitalisation declined to $26bn during the PTI government, he said, adding that the decrease showed a lack of investor confidence in the previous government. Dar also criticised the PTI government for increasing the country’s debts significantly. “In 2017-18, GDP growth had surpassed six per cent, inflation was at 5%, food inflation at 2% … After the 2018 elections, a selected government came into power. Because of its failures, Pakistan’s economy shrunk.” The finmin also assured the House that the prime minister and his cabinet would adopt “simplicity” and the former would take the nation into confidence soon in this regard. Dar hoped that the country would again move towards development. “But it is our responsibility to adopt the measures, and give sacrifices. The premier will demonstrate frugality and the cabinet will also reduce its expenses.” He said that the economy was plagued by two major issues: fiscal deficit and current account deficit. “We are committed to controlling and reducing both these deficits. Through the IMF programme, our foreign exchange reserves will increase, the rupee will stabilise, our exports and remittances will also improve and issues regarding opening of LCs will also cease.” Dar expressed the hope that the Federal Board of Revenue (FBR) would achieve its collection targets. He said that the Rs170bn collected under the measures introduced in the finance bill would reduce the country’s fiscal deficit. The minister ended his speech by reminding the House that each time he presented a budget between 2013 and 2017, he had stressed the need for a “national economic agenda – a charter of economy”. “We should come together and compile a national economic agenda, and implement it [regardless] of which government is in power […] but somehow I was not able to achieve this wish.” He highlighted that in 2013 the country was on the cusp of defaulting when all politicians came together to change the direction Pakistan was heading in. He said that this was needed now more than ever. “Right now, what is direly needed is that we come together as one and formulate a roadmap for Pakistan’s economy. Again I invite everyone to sit down and adopt a single national approach towards our economy.” Once the minister wrapped up his speech, the NA speaker said that the bill would not be referred to the relevant standing committee under Rule 122 of the Rules of Procedure. During this time, the reporters present in the press gallery had staged a walkout after Azad Jammu and Kashmir (AJK) Prime Minister Sardar Tanveer Ilyas allegedly misbehaved with one of their colleagues. However, the reporters returned to the gallery after Qamar Zaman Kaira and Shazia Marri intervened.