Govt unveils supplementary finance bill in line with IMF’s demands

Federal Minister for Finance and Revenue Shaukat Tarin. — APP/File
Federal Minister for Finance and Revenue Shaukat Tarin. — APP/File

ISLAMABAD: Federal Minister for Finance Shaukat Tarin presents the much-awaited supplementary finance bill — termed by the Opposition as a “mini-budget” — in the National Assembly, as a pre-requisite to resume the $6 billion External Fund Facility (EFF) of the International Monetary Fund (IMF).

The Opposition staged a vehement protest and chanted slogans to prevent Shaukat Tarin from introducing the Finance Bill 2021 and SBP Amendment Bill in the House.

‘Don’t sell Pakistan’

Speaking on the occasion, PML-N leader Khawaja Asif said the sovereignty of Pakistan is being sold. “The nation is ashamed of what is happening in the House today,” he added.

He further said that the PTI-led government is trying to “enslave Pakistanis financially.”

“You’re giving the State Bank of Pakistan’s (SBP) control to IMF. Please don’t surrender Pakistan’s sovereignty,” he reiterated.

Highlighting the promises made by the PTI leaders, he said that the government has been lying to the people for the last three years and recent local body elections in Khyber Pakhtunkhwa are proof of this.

Opposition protests against ‘false budget’

PML-N Spokesperson Marriyum Aurangzeb, speaking to the media outside the Parliament House, said that the Opposition will fight the oppressors who have put pressure on the pockets of common people.

“The mini-budget will cause more inflation to burden the masses,” she said, adding that the Opposition will protest against the government “inside and outside the Parliament.”

Terming the bill as the “false budget”, the PML-N leader said: “Prime Minister Imran Khan lies every day, he should be held accountable for the soaring inflation.”

“The government has enslaved the people under the IMF, we will fully contest the mini-budget,” she said.

Supplementary finance bill

According to the finance ministry’s proposal, the government will impose a tax on approximately 150 goods at a rate of 17%. Therefore, goods that were currently either completely exempt from General Sales Tax (GST) or being taxed at 5% to 12% rates would now be taxed at 17%.

  • The income tax rate on mobile phone calls will increase from 10% to 15%.
  • It was also proposed that imported meat and poultry items should be exempted from tax.
  • Meanwhile, the GST rate on cars above 1,000cc will go up to 17% and the tax on the import of electric vehicles in CBU conditions will increase from 5% to 17%.
  • Zero-rating available on supplies of raw materials for imported milk would be withdrawn and be taxed at 17%.
  • Duty-free shops will be taxed at 17%. As they will be taxed for the first time, there are no revenue estimates.
  • The finance bill also proposes that bread prepared in bakeries, restaurants, food chains and shops be taxed at a 17% rate.
  • Sales tax on prepared foodstuff and sweetmeats supplied by restaurants, bakeries, and sweet shops will increase to 17%.
  • Goods received as gifts from a foreign government or organisation will be taxed at 17%.
  • Cottonseed is proposed to be taxed at 17% GST. Meanwhile, the bill proposed increasing the tax on machinery for the poultry sector from 7% to 17%.
  • The GST on silver and gold will increase from 1% to 17%, while tax will be imposed on computers and laptops.
  • Raw material for medicines will be taxed at 17% GST.

According to the bill, the end of tax exemption on imported food items will impose an additional burden of Rs215 billion.

The “mini-budget” was one of the conditions of the IMF which was to be met before January 12, 2022, in order to recover more than $1 billion in instalments from the Fund.

Earlier, Prime Minister Imran Khan had summoned a federal cabinet meeting to approve the Finance Bill, which was later to be presented in the National Assembly.

Following the meeting, Federal Minister for Broadcasting and Information Fawad Chaudhry confirmed on Twitter that the federal cabinet has approved the bill.

More to follow.

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