‘Mini-budget’ to be presented to parliament shortly

Finance Minister Asad Umar is expected to present what has been described as a ‘mini-budget’ during the National Assembly session being held Wednesday evening.

Earlier, Umar, without revealing any specifics, had said the ‘mini-budget’ — technically the Finance Supplementary (Second Amendment) Bill of 2019 — will help generate more revenue for the government.

Earlier today, the federal cabinet headed by Prime Minister Imran Khan was given a briefing on the bill, after which it was taken to the parliament for debate.

What was expected from the mini-budget
The supplementary budget was expected to offer major incentives to boost the stock market, housing, agriculture and industrial sectors, besides imposing punitive duties on luxury imports.

According to the finance ministry’s adviser and spokesman Dr Khaqan Najeeb Khan, the mini-budget would support ease of business processes, simplify procedures and facilitate business by reducing bureaucratic red-tape.

Informed sources, however, said the government was planning to reverse documentation reforms introduced for the equity markets in a bid to turn around the declining stock index which fell from its high at 53,000 points in 2016 to around 38,000 points at present. The package was also likely to include the reduction and removal of some tax rates, commissions and capital gains tax.

Third bill for fiscal 2019
The ‘mini-budget’ would constitute the third finance bill for fiscal 2018-2019.

The National Assembly had in May 2018 passed the Finance Bill 2018-19 during the tenure of the PML-N government, the basic structure of which remained the same as announced by then Finance Minister Miftah Ismail on Apr 27, 2018.

Then, in September 2018, Umar had presented the incumbent Pakistan Tehreek-i-Insaf (PTI) government’s amendments to the budget announced by the PML-N.

The highlights of the amendment included a cut in federal development programmes and measures to bring the budget deficit down to 5.1 per cent.

Tax rates were lower than the previous year and the tax relief that had been granted by the PML-N was revoked from salaried persons earning more than Rs200,000 per month. The tax rate in the highest income tax slab was raised from 15 pc to 30 pc. The rate of withholding tax on banking transactions for non-tax filers was increased to 0.6pc

Other developments included an increase in federal excise duty on imports of luxury vehicles and duties on ‘expensive’ cell phones. Customs duty was also increased on more than 5,000 ‘luxury’ items. Regulatory duty was increased on the import of more than 900 items.

The Insaf Sehat Card facility was expanded to Fata and Islamabad Capital Territory.

Read more: The good, the bad and the uncertain of PTI’s ‘mini-budget’

Opposition opposes govt decision to announce mini-budget
On Jan 16, the government had sought the opposition’s support for the mini-budget announced today. National Assembly Speaker Asad Qaiser had facilitated two meetings between the government and opposition in which the issues of the mini-budget and formation of committees of the NA were discussed.

However, leaders of various political parties had opposed the government’s plans, saying the mini-budget “will add to the miseries of public” and “badly affect the commerce and industrial sectors in the country”.

Parliamentary leader of the PPP in the Senate, Sherry Rehman, had in a statement expressed her reservations over ever-increasing prices of various commodities.

Similarly, several PML-N leaders, including former prime minister Shahid Khaqan Abbasi, had also criticised the government’s move to present another finance bill.

Speaking at a news conference on Jan 12, the PML-N leaders had lashed out at the PTI government for what they termed “directionless and failed” economic policies, which they claimed had drastically brought down the country’s growth rate in just five months.