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Controversial tax amnesty bill finds way to NA

January 04, 2013

A view of the National Assembly. — File photo

ISLAMABAD, Jan 4: The controversial bill meant to provide opportunity to millions to whiten their black money finally found its way to the National Assembly on Friday, but the fate of the bill still hangs in the balance with two key partners of the ruling coalition including MQM and PML-Q joining hands with the main opposition PML-N in rejecting the proposed amnesty scheme.

The opposition by the coalition partners has at least blocked prospects for a smooth sailing of the bill in the National Assembly.

The House adopted through voice vote a motion seeking to approve recommendation to the National Assembly on tax laws (amendment) bill 2012.

Finance Minister Dr Abdul Hafeez Sheikh, in his reply to objections raised by friends and foes, brushed aside an impression that the bill aimed at protecting the rich. He argued that there were only 800,000 taxpayers in the country and the step would bring a substantial number of people into the tax net.

He said the bill would be thoroughly debated in the National Assembly and a elected representatives alone would make a decision. The minister said the government did not want to give unbridled powers to the Federal Board of Revenue (FBR) which could be used to harass the people.

Dr Sheikh said the people to be brought into the tax net were richest among the richest, held multiple bank accounts and undertook frequent foreign trips. “You would be surprised to see their expenditure,” he remarked and said the money recovered from them can be used for the poor.

Rejecting criticism of the government for coming up with the plan only at the fag end of its tenure, he said members of the parliament would continue to draw salaries for legislation. “We will continue to perform our duty till the last day in government.”

He said the move would not benefit the incumbent government, but would certainly be beneficial for the incoming government after the polls.

The finance minister said the tax- to-gross domestic product (GDP) ratio had improved and revenues generated through taxes risen by Rs 350 billion last year. He agreed that honest taxpayers should be respected and given incentives.

Hafeez Sheikh said the government wanted to limit the number of taxes to two. The number of income tax slabs had been reduced from 17 to seven. He said the concession was meant only for the first year and that too was linked with the payment of investment tax, stressing that the tax would be payable in subsequent years.

Earlier, chairperson of the senate’s standing committee on finance, Senator Nasreen Jalil, presented a report of the committee on the tax laws (amendment) bill 2012 in the House. She said she and her party were against the bill and the Senate should not make any recommendation to the National Assembly on it.

EVEN-HANDED APPROACH: Opposing the bill, leader of opposition in the Senate, Mohammad Ishaq Dar, said the CBR had a credible data of 2.9 million people to be brought into the tax net. “We plan to adopt the normal process for 0.2 million and give amnesty to rest of the 2.7 million at the cost of Rs 1 to 1.5 million of undeclared money.”

He was of the view that an even-handed approach should be adopted for all the 2.9 million potential taxpayers. A bill that discriminates between tax evaders was bound to be set aside by the court even after passage, the senator said.

He said it should not have been declared as money bill. Ishaq Dar said the law the government intended to pass at the end of its term could be misread as a concession for parliamentarians.

He said it was not a prerogative of the outgoing assembly to pass legislation which was flawed otherwise as well.

The government wanted to get around Rs 100 billion from people who should pay Rs 1 to 1.5 trillion instead. “The FBR should proceed against all potential taxpayers under the normal law and reconsider its amnesty scheme.”

Mir Hasil Bizenjo of the National Party also opposed the proposed amnesty scheme and observed that it should be left for the next government to decide.

Col (Retd) Tahir Mashhadi, opposing the bill, said a money bill under Article 73 of the Constitution had to be simultaneously tabled in both the houses of parliament. Pointing out that the National Assembly was not even in session, he said it was a blatant violation of the Constitution. “How can lawmakers be law-breakers,” he wondered.

Tahir Mashhadi said the proposed scheme would open floodgates of corruption. He termed the scheme against the Constitution and the poor.

Rafiq Rajwana of PML-N termed the proposed scheme a “financial NRO”. He said he was at a loss to understand under what compulsion the outgoing government wanted to go ahead with the plan. “It is against fundamental rights as everybody has to be treated without discrimination.”

Mushahid Hussain Sayed, secretary general of the PML_Q, concurred with the opposition, declaring that his party would vote against it.

Interior Minister Rehman Malik told the house that 90 per cent of slum dwellers were Afghan refugees. He said footprints of many handlers and facilitators of suicide bombings led to slums.

MOBILE PHONES: Rehman Malik defended the decision to suspend mobile phone service, saying that all improvised bombings in Quetta and Karachi were carried out through mobiles. He said no killing took place in the two cities on Thursday, attributing it to suspension of mobile service. He said all illegal SIMs should be blocked and stressed the need for a law.

Chaudhry Jaffar Iqbal, who has been elected unopposed as Senator on a seat in Punjab that fell vacant after the death of PPP’s Salahuddin Dogar, took oath as member of the House.

Another highlight of the proceedings was a token walkout by PPP stalwart Mian Raza Rabbani in protest against the “attitude of the KESC management”.

He accused the KESC of running a state within a state. The senators from Awami National Party also joined the walkout.

The session was prorogued sine die.