The National Assembly on Monday passed the Finance (Supplementary) Bill, 2023 dubbed as ‘mini-budget’ to impose new taxes worth Rs170 billion in a bid to revive the stalled International Monetary Fund (IMF) bailout programme.
Minister for Finance Ishaq Dar introduced the bill in the House last week followed by formal debate that started after Commerce Minister Syed Naveed Qamar moved a motion on February 17.
In his concluding speech, the finance minister said that this bill proposes imposing new taxes of Rs170 billion to minimise the fiscal deficit.
He said that his economic team had a hectic routine during the last ten days holding talks with the IMF to revive the programme, during which it agreed to take some tough decisions for streamlining the deteriorating condition of the economy.
Also read: Rs170b mini-budget to spur inflation
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 Rs40 billion increase in the budget of the Benazir Income Support Programme (BISP).
“The government has proposed an increase in 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 the Senate Standing Committee on Finance has proposed some amendments related to federal excise duty on airline tickets to different countries which have been adopted.
The minister said that every cigarette brand would pay duties as per the relevant category which it had been paying before the introduction of the bill.
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 minimise the budget deficit for the FY23.
He said the IMF was much concerned over the huge losses, such as the power sector which is facing losses of around Rs1,450 billion per year. He said that a total amount of Rs3 trillion is being spent to generate electricity while the government collects only Rs1,550 billion.
Due to power theft, line loss and non-payment of electricity bills, the government is facing about Rs1450 billion deficit, he added.
The minister said that both houses of parliament talked about reducing the expenses and the prime minister would give a comprehensive road map in coming days for austerity measures.
Dar also criticised the economic policies of the previous government and said that poor management and lack of fiscal discipline damaged the economy.
Also read: Tax the rich, help the poor, IMF advises Pakistan
He said that 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 IMF so the present government was implementing conditions agreed by the last PTI government
Dar said due to the reforms being taken by the incumbent government, the economy would first witness stability and then 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 in the upcoming budget.