On Friday, the National Assembly adjourned without voting on the Finance Bill after a brief debate on the budget proposals.
Finance Minister Ishaq Dar on Wednesday presented the Finance (Supplementary) Bill 2023 in both houses to raise revenue of Rs 170 billion.
Speaking to reporters after the meeting, Dar said he expects the bill to be passed by both houses by Monday or Tuesday as Senate Chairman Sadiq Sanjrani has given us time till Friday.
Pakistan is in dire need of funds as it is battling a serious economic crisis as foreign exchange reserves held by the State Bank of Pakistan (SBP) barely cover a month’s worth of imports.
Finance Bill proposals
- Increase in GST on luxury items from 17% to 25%
- FED on business and first-class air tickets be increased to Rs20,000 or 50% — whichever is higher
- 10% withholding adjustable advance income tax to be imposed on marriage halls
- Increase in FED on cigarettes, soft and sugary drinks
- FED on cement to be raised from Rs1.5 kg to Rs2 kg
- Increase in GST from standard 17% to 18%
- GST to not be imposed on essential goods — wheat, rice, milk, pulses, vegetables, fruits, fish, eggs, meat
- BISP stipend to be increased; govt to allocate Rs400 billion for programme
The revenue measures, which were announced in the Money Bill, were included to attract funding and strike a staff-level deal with the lender.
Pakistan’s government and the IMF failed to reach an agreement last week and the visiting IMF delegation left Islamabad after 10 days of talks, but said talks would continue. Pakistan is in dire need of funds as it is battling a severe economic crisis.
An agreement on the ninth review of the program would release $1.1 billion of a total of $2.5 billion pending in 2019 as part of the current package that expires on June 30. These funds are crucial to an economy whose current foreign exchange reserves barely cover three. Imports of weeks.
The two sides are holding virtual talks to iron out differences on financial measures.
‘Death warrant’
Meanwhile, during the debate on the budget proposals in the Senate today, Prime Minister Nazir Tarar mocked the Pakistan Tehreek-e-Insaf (PTI) government and said that no one is happy with inflation but whatever has happened in the last 4 years. The years should advance.
Who made the deal with IMF on petroleum levy and electricity rates? He asked pointing to the opposition benches.
“This is the money bill that you [PTI] wrote during your tenure,” he said.
He said that the government has imposed tax on luxury items so that the common man is not affected.
Jamaat-e-Islami (JI) Senator Mushtaq Ahmed termed the mini-budget as a ‘death warrant’ and said that the mini-budget was not prepared in Pakistan but in the IMF office.
