NA passes Finance Supplementary Bill 2023

ISLAMABAD: The National Assembly passed the Finance (Supplementary) Bill 2023, proposing additional taxes and duties of Rs170 billion to meet the conditions set by the International Monetary Fund (IMF), ARY News reported on Monday.

The NA passed the Finance (Supplementary) Bill 2023, proposing additional taxes and duties of Rs170 billion to meet the IMF conditions for the revival of the Extended Fund Facility (EFF).

Under the finance supplementary bill, the government decided to increase the General Sales Tax (GST) from 17 per cent to 18 per cent.

It has been decided to hike the GST on luxury items from 17 per cent to 25 per cent.

For air travel, it has been proposed that a fixed amount of Federal Excise Duty (FED) ranging from Rs250,000 to Rs75,000 of different tiers as per the International Air Transport Association (IATA) on airfare for first, business and club classes should be imposed.

Moreover, a 10 per cent withholding adjustable advance tax will be levied on the bills of wedding halls in order to promote simplicity and austerity.

The FED will be enhanced on sugary and aerated drinks and it will also be increased on cement from Rs1.5 to Rs2 per kg.

Ishaq Dar presented bill

Finance Minister Ishaq Dar introduced the bill in the House on February 15, and the formal debate started on it after moving a motion by Minister for Commerce Syed Naveed Qamar on February 17, 2023.

In his concluding speech, Dar said that the bill proposed to impose new taxes of Rs170 billion will minimize the fiscal deficit.

He said that his economic team had a hectic routine during the last 10 days and it held talks with the International Monetary Fund (IMF) to revive the loan program, during which it agreed to take some tough decisions for streamlining the deteriorating condition of the economy, the state news agency reported.

He said the new revenue measures would not affect the poor segments of society. In order to help the poor cope with the rising inflation, he said the government had also proposed a Rs 40 billion increase in the budget of the Benazir Income Support Program (BISP).

The government has proposed to increase the BISP budget from Rs360 billion to Rs400 billion, by allocating additional funds of Rs40 billion to benefit the (BISP) beneficiaries, he added.

He said Senate Standing Committee on Finance has proposed some amendments related to federal excise duty on air tickets to different countries which have been adopted.

The minister said that every cigarette brand would pay the duty as per the category which it had been paying before the introduction of the bill.

Ishaq Dar expressed satisfaction with the performance of the Federal Board of Revenue (FBR) and hoped that the revenue collection target set for the year 2022-23 would be achieved easily. The additional proposed tax measures of Rs170 billion, he added, were not meant to bridge the gap of the collection target, rather the same would help minimize the budget deficit for FY23.

He said the IMF was much concerned over the huge losses, such as the power sector was facing losses of around Rs1,450 billion per year. He said that a total amount of Rs3,000 billion is being spent to generate electricity while the government collects only Rs1,550 billion.

He said that due to power theft, line loss and non-payment of electricity bills, the government was facing about Rs1450 billion deficit.

The minister said that both houses of parliament talked about reducing the expenses and that the Prime Minister would give a comprehensive road map in the coming days for austerity measures.

Ishaq Dar also criticised the economic policies of the previous government and said that poor management and lack of fiscal discipline damaged the economy.

He said that the PTI government did not fulfil commitments with IMF and sabotaged the economy before its ouster. It was the obligation of the State to honour the agreement signed with the IMF so the present government was implementing the point agreed upon by the PIT government.

Ishaq Dar said due to the reforms being taken by the incumbent government, the economy would first get stabilised and then witness rapid growth in the coming years.

He said the new revenue measures would not affect the poor segments of society as most of the new taxes were being imposed on luxury items not used by them.

The minister also thanked the members from both houses of parliament for their recommendations on the bill. He said their feedback has been reviewed and it would be incorporated into the upcoming budget.

Opposition’s amendments rejected

The House rejected all the amendments moved by the opposition.

Moreover, the National Commission for Minorities Bill, 2023 was also laid before the House. The bill was introduced by Finance Minister Ishaq Dar.

Earlier, the newly-elected Member National Assembly Mahmood Baqi Moulvi took the oath of office. He was elected on the PTI ticket on a seat vacated due to the death of PTI MNA Dr Amir Liaquat Hussain. Speaker Raja Pervaiz Ashraf administered the oath.