Jan 07, 2022: Senators on Friday termed the 'supplementary finance bill 2021' an effort to improve the taxation system of the country as it seeks to register the undocumented sectors of economy with Federal Board of Revenue (FBR).
Senator Waleed Iqbal said while participating in the debate on the supplementary bill in the Upper House that the current supplementary bill will have negligible impact on the poor segments of the society as a major portion of taxes are either refundable and adjustable or are linked to the luxurious items not consumed by the poor. He said Pakistan badly needed documentation of the country's economy, therefore, the government had proposed to impose taxes on pharmaceutical and industrial sectors to bring the sector under tax net.
He said a number of tax exemptions on various sectors were being withdrawn to remove distortions in the taxation system. However, he said, the government would expand targeted subsidy instead of offering tax exemptions. He also said that out of the total 800 pharmaceutical companies only 453 were registered with the FBR and after the passage of supplementary bill all companies would be brought under the tax net.
Speaking on the occasion, Senator Faisal Javed said this was not a mini budget but just a supplementary bill. He said facts and figures with respect to the bill were being distorted to create hype among masses. He said 82 percent of the total loans from the International Monetary Fund (IMF) were obtained by the governments led by Pakistan People's Party (PPP) and Pakistan Muslim League-N, therefore these parties should not mislead the nation with regard to the IMF.
He said the IMF had asked the government to impose Rs 700 billion new taxes but, Prime Minster Imran Khan showed resistance and brought the level of taxes to Rs. 343 billion. He further said the new taxes were imposed only on rich and they had nothing to do with the poor. He added that the previous government had put the country on the verge of collapse, while the current government led by Pakistan Tehreek-e-Insaaf helped strengthened the institutions that were now transforming from huge net losses to profitable institutions. He said the universal health insurance offered by the current government was an exemplary initiative under which each family would get health cover of up to Rs. one million per year.
Senator Mushtaq said Pakistani people could not afford further inflation, therefore, the government should focus on keeping prices of the essential items in control instead of imposing new taxes.
Senator Rukhsana Zuberi stressed the need for adopting strict austerity measures. she said: “As a poor country that we are, we can not afford luxurious lifestyles”. She also suggested taxing the international food brands, big bakeries, luxurious items, food served in five stars hotels, and other such high end products, because, she reasoned, the people who could afford such high price products, could also afford the additional tax.
Senator Dr Zarka Suhrwardi said the opposition parties who were criticizing the government on the IMF programme were in fact the main cause of the worst economic situation of the country due to which Pakistan had to approach IMF again and again.
With respect to austerity measures, she said the current government’s borrowing from the State Bank of Pakistan (SBP) was almost zero. She said austerity measures were already in place as the Prime Minister had cut down his foreign visits to minimum level and total expenditures on the visits so far were recorded at Rs 200 million only which were equivalent to a single visit of the past government’s prime minister.
Senator Chaudhry Ejaz said despite COVID, our exports, remittances, and revenues increased to record level. He said the former finance minister, who is an absconder now, obtained heavy loans during his tenure which were mainly utilized to flood the local market only to control the exchange rate artificially.
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