ISLAMABAD: Finance Minister Ishaq Dar on Thursday told the National Assembly that no more taxes would be imposed on the pressure of the International Monetary Fund (IMF) for its financial bail-out package.
“Programme or no programme, we shall not impose further taxes. We have rejected the proposal of IMF for imposition of more taxes,” he said.
Dar was speaking in response to points raised by the members in discussion on the finance bill during the first reading.
The newly-elected Pakistan Muslim League – Nawaz (PML-N) government is in talks with the IMF on a new loan programme. However, sources said that the lender was displeased over a loosening monetary policy of the State Bank, and sceptic over the government’s tax collection target, projections for foreign inflows in the budget and the steps to achieve macroeconomic targets in the medium-term.
During his speech, the finance minister also noted that the government’s ambitious tax collection target were “a tall order”.
“The IMF programme shall be in the interest of Pakistan and on our terms and conditions. Tax collections target is a ‘tall order’ but we shall achieve it by increasing tax net and stopping tax theft,” he added.
He said data for tax collection already exists. “What we need is an effective connectivity. We have also increased the fine amount and imprisonment period for tax evaders”.
Finance bill passed, opposition amendments rejected
The National Assembly on Thursday passed the Finance Bill 2013-14 having an outlay of Rs 3.985 trillion with a majority vote.
The federal government passed the Finance Bill 2013-14 with a majority vote. However, The PML-N rejected all amendments proposed by the opposition.
A number of amendments proposed by the finance minister were incorporated. About 21 recommendations proposed by the Senate were also incorporated in the bill.
Dar clarified that perks and privileges of the NA Speakers and the Senate Chairmen as well as the members are being adjusted to the same level as were before 2010 and 2012 respectively.
The minister said the government honoured the Supreme Court’s decision regarding collection of General Sales Tax (GST) from June 13.
But, he said, this tax was still collected from the consumers and was not coming to national kitty. He also rejected the notion that with the increase of one per cent had resulted in four to five per cent additional tax collection.
He also clarified that the government had not introduced any mini-budget and said the proposals in the finance bill are not passed as it is because its final shape is created after inclusion of members’ recommendations as well as those coming from the Senate.
He said at present the tax collection rate is even lesser than the inflation rate and this is the failure of the economic policies of the previous government.
Ishaq Dar said no tax has been imposed on pilgrims. Rather, it is income tax effect on the operators which was imposed in previous year’s budget to the tune of Rs 2500. “We have only proposed to increase it to Rs 5000 and we are discussing it with the operators”.
The Finance Minister asked the opposition not to play politics on the budget. “When the country is in serious financial crisis, we need not to play politics. The government is trying its best and we need support from everybody. Let us work hard for at least three years, thereon we shall have time for politicking”.
He also clarified that number of kitchen items are already exempted from tax to facilitate the poor in the country.
Opposition on taxation
Earlier opening discussion on the finance bill, Pakistan People’s Party (PPP) leader Syed Naveed Qamar said the clause in the bill concerning wages will create discrimination among the salaried class. This matter should have been discussed at the Finance Committee.
He said even the elected members are being treated discriminately in terms of taxes imposition. Collection of GST by the government in the name of Excise Duty will embarrass provinces who will have to go for dual taxation.
Naveed Qamar said the government will result in brain drain from the country as he claimed that the government has introduced a mini-budget just within 20 days of the annual budget and feared more mini-budgets in coming days.
Pakistan Tehrik-i-Insaf (PTI) leader Shah Mahmood Qureshi said, imposition of GST from June 13, 2013 was unconstitutional and the Supreme Court endorsed the opposition's stance in its decision.
He said the government did not pay heed to the opposition’s suggestions and its measures will put extra burden on the poor than the affluent. Moreover, figures of the government have raised many questions and even the IMF was not satisfied with them.
Muttahida Qaumi Movement (MQM) leader Syed Asif Hasnain said previous government did not impose GST on demand of people and it was a good decision.
He alleged that the current budget had been prepared on the dictation of the IMF and claimed GST would range from 4 per cent to 19 per cent.