News Analysis |
Finance Minister Asad Umar on Wednesday vigorously defended the amendments in the Finance (Amendment) Bill 2018 as the government under pressure conceded and abolished the restriction on non-filers on the purchase of cars and land.
Nevertheless, the government did not ban all categories and exempted the Overseas Pakistanis, buyers of motorcycles and rickshaws of up to 200cc engine capacity, and widows [only on the inherited property]. The PML-N government had imposed the complete ban on non-filers in the highly controversial sixth-budget only months prior to the elections.
An individual [non-filer] holding a national identity card for overseas Pakistani, who can prove to have received remittance from abroad via banking channel is eligible to book, register or purchase a vehicle within the 60 days of receiving the funds. Similarly, overseas Pakistani’s can purchase property, being a non-filer using the proven remitted funds through banking channels.
Asad Umar remained true to his words and accepted the constructive criticism for allowing the non-tax filers to buy cars and land. Asad’s reasoning to allow this to facilitate overseas investors was not justified.
Government is also contemplating to impose penalties on manufacturers for selling vehicles to non-filers. An individual—who would purchase/register a property in the name of non-filers would also be liable to pay penalties.
PTI-led coalition government’s first finance bill was passed with a majority [158-120] during a heated confrontation between the incumbent government and the opposition leaders [who rejected all the amendments proposed by the opposition].
During his hard-hitting speech, Asad Umar elaborated the immense challenges facing Pakistan’s beleaguered economy. He apprised the parliamentarians that amended bill would be able to solve the issues.
Read more: Economic Uncertainty to end by mid-October: Asad Umar
Asad aptly replied to the criticism from the former minister for planning and development, Ahsan Iqbal and told the legislators that it was unfair to compare the performance of 40-day-old PTI government with the previous regimes—which failed to fix the problems in the last 40-years.
He unwillingly had to praise the PPP’s tenure in comparison to the shocking performance of the PML-N in last 5-years. The FM said that the gas sector was fine during PPP’s government; however, PML-N’s wrong policies destroyed it. Similarly, the debt on the public enterprises flourished acutely and has reached Rs 1.2 trillion. The circular debt for just this past year alone was Rs403 billion, whereas PPP left it at Rs 480 billion.
The PML-N government had imposed the complete ban on non-filers in the highly controversial sixth-budget only months prior to the elections.
He also blamed the former government for failing to end load-shedding in the country. Furthermore, he accused the PML-N regime of purposely keeping the prices of electricity for the projects inaugurated during their governments low—which incumbent government is forced to increase on the recommendation of regulators.
Read more: Asad Umar’s ‘not so secretive plan’ to revive Pakistan’s economy
Unlike the previous government, PTI’s policies are aiming to provide relief to the poor that’s why those buying a motorcycle and 200cc rickshaws would not have to be a filer. Similarly, the government is showing the will to facilitate the farmers. Government is giving subsidies on urea and LNG-operated plants.
Moreover, subsidies worth Rs6-7 billion would be provided in the “Rabi Season” alone. Asad also said that government is specifically targeting the super-rich—non-tax filers. He warned the tax evaders that ‘state is not weak and would catch you and no one would escape unscathed’.
During his hard-hitting speech, Asad Umar elaborated the immense challenges facing Pakistan’s beleaguered economy. He apprised the parliamentarians that amended bill would be able to solve the issues.
Finance Minister again clarified that CPEC is an exclusive bilateral strategic project between the two “all-weather friends’ and KSA is only a third-party investor. This was agreed during Chinese foreign minister’s visit to Pakistan last month that other countries could be invited for investment in individual projects.
Read more: Asad Vs Shahbaz: Pointscoring or a conflict of narrative?
PTI government is taking measures to broaden the tax base to increase tax collection. The incumbent government bemoaned the empty coffers. There is no denying that “Gross Public Debt” and “Total External Debt & Liabilities” have increased steeply to reach 72.5% and 33.6% of the GDP. The previous regime enjoyed extravagant spending spree prior to elections and adopted ‘crony friendly’ policies.
PTI government should learn from the past. It needs to improve on debt to export ratio, otherwise, the debt pile would be hard to decrease even for the PTI government. It needs to invest in revenue-generating assets and industries. The special attention should be paid to industries and agriculture sectors to improve revenue-earning capacity.
Asad Umar remained true to his words and accepted the constructive criticism for allowing the non-tax filers to buy cars and land. Asad’s reasoning to allow this to facilitate overseas investors did not appear justified. However, his decision to put a restriction on non-filers except for certain categories could prove beneficial by adding revenue into the empty treasure chest.