National Assembly passes mini budget and State Bank autonomy bill

Opposition made fiery speeches in the session but failed to stop the government to pass the bills with majority vote

The National Assembly on Thursday passes the controversial Finance (Supplementary) Bill, generally known as the "mini-budget", and the State Bank of Pakistan (Amendment) Bill 2021.

The finance bill and the SBP bill, both tabled on Dec 30, are necessary to ensure that Pakistan’s sixth review of the $6 billion Extended Fund Facility gets cleared by the International Monetary Fund’s (IMF) executive board.

The government's amendments to the proposed bill were approved by the NA. The government introduced changes to Clause 3 of the bill, under which small shops will not be taxed on bread, chapattis, sheermal, naans, vermicelli, buns and rusk. Tier one retailers, restaurants, food chains and sweet shops will be taxed on the sale of these items.

A sales tax of 8.5 per cent will be imposed on 1,800 cc domestic and hybrid and domestic cars. A tax of 12.75pc will be imposed on 1,801 to 2,500 cc hybrid vehicles while imported electric vehicles will be taxed at 12.5pc.

No general sales tax will be imposed on a 200g carton of milk, while a 17pc GST will be imposed on formula milk worth more than Rs500. Tax on imported vehicles was also increased under the changes, from five per cent to 12.5pc. The federal excise duty on all imported vehicles will remain the same.

There will be a duty of 2.5pc on locally manufactured 1,300 cc vehicles, down from the 5pc proposed earlier. The duty on locally manufactured 1,300 to 2,000 cc cars was also reduced to 5pc from 10pc. A 10pc duty will be imposed on locally manufactured cars greater than 2,100 cc.

The government's amendments to Clause 5 and Clause 6 were also approved during the session.

Opposition’s amendments rejected

The Opposition's amendments to the finance bill were all rejected. When voting first took place, 150 members voted in favour of the amendments, while 168 voted against them. Upon a recount due to the Opposition's objections, there were 146 votes counted in favour of the amendments, and 163 counted against them. 

The National Assembly is comprised of 342 lawmakers, of which the treasury benches have182 members while the Opposition benches have 160 members.

In today's session, 14 of the government's lawmakers are absent and 10 from the Opposition side.

Shortly after the session began, PPP's Shazia Marri moved a motion recommending that the finance bill be circulated for public opinion under Rule 124 of Procedure and Conduct of Business in the National Assembly so that it could be proven how "anti-people" it was. However, the motion was opposed by Finance Minister Shaukat Tarin.

The opposition lawmakers also called for the House to debate the recommendations put forth by the Senate. PML-N's Ahsan Iqbal said that the recommendations put forth by the Senate regarding the mini-budget had not been discussed and called it an insult to the upper house of Parliament.

Voting also took place on several amendments moved by the opposition to the finance bill that were subsequently rejected through a voice vote.

The opposition demanded that a physical count be conducted for some of the amendments tabled by the opposition, including those by Mohsin Dawar and PML-N's Shahid Khaqan Abbasi. However, the NA speaker refused under Rule 29 of Procedure and Conduct of Business in the National Assembly.

A physical count was later conducted on the amendments moved by PPP's Marri, with 168 lawmakers against it and 150 in favour of it.

Later, a physical count was conducted for a second time. The government was once again in majority and the amendments were rejected. The opposition's amendments to Clause 3 of the finance bill were rejected with 163 votes against it and 143 in favour. 

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