ISLAMABAD: The National Assembly on Wednesday passed the Finance Supplementary (Amendment) Bill 2018 amid ruckus created by opposition members as Finance Minister Asad Umar said, “the state contains the necessary machinery to recover money from tax evaders”.
The Lower House passed the amended bill with a clear majority.
“The government had called for recommendations on the budget. I am thankful to those who complied.” The finance minister said as he announced the reinstatement of restrictions on the purchase of property and vehicles by non-filers. Three exceptions were made to the restriction.
“These exemptions include overseas Pakistanis, people inheriting property and those earning through informal means.” Umer added that “fines for people who engage in property sales while they are non-filers have also been imposed.”
A campaign against those dodging tax returns has also been initiated, Umar added. “129 notices have been issued since Tuesday. The campaign would extend to thousands of other non-filers.”
During the session, the finance minister also appealed to those belonging to the affluent class to file their tax returns. “We have extended the time for those who still want to file their returns.”
Umer added that the State Bank of Pakistan (SBP) has been contacted to inquire details of withholding tax deducted from account holders. “We only want information of those who keep large sums of money in their accounts but are non-filers.”
“We are making use of modern methods to identify tax evaders. This recommendation has been added as an amendment in the finance bill.” The finance minister also announced a continuation in subsidies given to the agriculture sector.
“Pakistan International Airlines (PIA) could not move forward because of its pending payments to PSO, Pakistan Steel Mills have also been closed for the past three years,” Umar stated.
Umar also highlighted the dismal performance of the previous governments and blamed them for the current economic predicament the country is experiencing.
Umar, following criticism from PML-N lawmaker Ahsan Iqbal, said that it is unfair that the 40-day-old PTI government is being asked to “fix matters that were not fixed in the previous 40 years”.
He reminded PML-N lawmakers of the problems they faced during their reign but could not deal with.
“The gas sector was fine during PPP’s government but got destroyed during the PML-N era.
“The circular debt for just this past year was Rs403 billion, and overall the circular debt has soared to Rs1.2 trillion. [How can] they say that streams of milk and honey used to flow in their reign,” the finance minister said.
The finance minister defended the PTI government’s policies, claiming that they were geared towards serving the poor, which he said wasn’t the case in previous eras.
“The PML-N never thought of the poor, which is why there was the condition of being a tax filer even for the purchase of a motorcycle,” he said. “We have removed this condition even for 200cc rickshaws so that the poor can be facilitated.
“The farmers are also close to our heart. We are giving subsidies on urea and LNG-operated plants. For Rabi season, too, we are giving subsidies worth Rs6bn to Rs7bn.”
Umar also said that action has begun against those “big personalities” who have still not bothered to become tax filers.
“169 such people have been issued notices,” he said. “No one should think that they will escape unscathed. This state is not so weak that it cannot catch you. Those who have considerable funds in banks, their details will be obtained,” he said. “There is still time, come within the tax net,” he warned.
The finance minister recalled the PML-N’s promise to end load-shedding in the buildup to the 2013 elections.
“You had vowed to end load-shedding, what happened of it,” Umar asked. “If Charsadda, Bannu, Swabi, Lyari, Noshki and Khuzdar are not a part of Pakistan, then your claim to having put an end to load-shedding is true.
“Nepra (the National Electric Power Regulatory Authority) has negated their claim to provide cheap electricity as well. Their own appointed regulator has recommended that the power tariff be increased by Rs3.89 [per unit]. All these projects whose [tariff] rates are [now] being hiked were inaugurated during their governments.”
Furthermore, the finance minister rejected the opposition’s suggestion of asking dam-fund donors about the source of their funds.
Following Umar’s speech, voting in the NA on the amended finance bill began. After the opposition rejected to a count of votes cast verbally, the speaker asked for a physical count, which showed 158 people in assent and 120 against the passage of the bill.
The bill was passed clause by clause and the session prorogued.
On Tuesday, the Cabinet’s Economic Coordination Committee made three changes to the supplementary budget it presented on September 18, reversing a key directive that once restricted non-filers from buying property worth more than Rs4 million and new cars.
Non-filers are people who do not file their tax returns with the Federal Board of Revenue. They include both people who pay tax on their income and those who evade it.
However, overseas Pakistanis will be allowed to buy new cars and new property. In case of inherited property, the beneficiary, a widow for example, is also exempt from the condition of filing tax returns. This means the property can be transferred to the beneficiary regardless of its value even if he or she is not a filer. The third change allows non-filers to purchase automobiles below 200 cc (engine), such as auto rickshaws and motorcycles, Umar told a private channel.
In May, the former government of the PML-N had imposed a ban on non-filers, preventing them from buying new vehicles. Similarly, non-filers were also banned from purchasing property valued at more than Rs4 million. The purpose of the ban was to bring these people into the tax net.
However, the proposals Umar presented on September 18, once again allowed non-filers to buy new cars and property, a decision that was met with severe criticism from former finance minister Miftah Ismail and some economists.
