Finance Minister Asad Umar presented the Finance Supplementary Second Amendment Bill, 2019 (also known as the mini-budget) during the National Assembly session on Wednesday amid jeers and shouts from the opposition.
This is not a new budget, he clarified. We want to ensure that this is the last IMF programme the government has to take, he said.
We don’t want the people to hear that the government has to go to the IMF because of the previous government’s negligence, said Umar.
He accused the previous government of trying to buy the election with its budget. The deficit should have been 4.1% but at the end of it was 6.6%, he said. “Where was that money supposed to come from?” he asked.
“It won’t come from their [the opposition’s] Swiss bank accounts, it will come from the people’s pockets,” he said.
Non-filers can now buy cars with engine capacity of 1300cc and below. This means they can now buy any cars from Suzuki Wagon R to Honda City and Swift. Previously, non filers were not allowed to buy new cars. Motorcycles and rickshaws were an exception because buyers of these automobiles belong to lower income groups. Umar said the tax rate on cars is being increased but didn’t mention the actual increase.
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.
As per the mini budget, you will only get Rs70 worth of credit on every Rs100 top-up. This is because the government has re-imposed taxes on mobile phone service consumption.
Previously the Supreme Court had barred the government from deducting any tax on mobile phone pre-paid cards. The SC order allowed users to consume Rs100 credit in its entirety with no tax on phone calls or text messages. The government has approved a 30% tax on mobile phone cards.
Financial institutions will now be charged a 20% tax in place of the current rate of 39% if they extend loans to facilitate the growth of agriculture (small farmers), SMEs, and low cost housing sectors.
This means you are more likely to get a loan for starting a business because the banks have been given incentives in the form of lower tax on income generated from loans given to these sectors.
The government has abolished the minimum withholding tax on banking transactions and withdrawals exceeding Rs50,000 for filers.
There has been no relaxation on property as the government continues with the previous policy. This means non-filers will not be able to buy property worth more than Rs5 million. Only overseas Pakistanis and those who inherit property from their parents will be exempt from this restriction.
PSL tickets may be cheaper this year as government exempt all sports franchises from taxes with effect from July 1.
What happened before his speech
Before he presented the mini-budget, the opposition called for the Punjab chief minister and the prime minister’s resignations over the Sahiwal killings.
Leader of the opposition Shehbaz Sharif said the CM cannot even respond to the call of nature without the premier’s permission.
Foreign Minister Shah Mahmood Qureshi slammed the opposition for derailing the session and said they have had two days to discuss the Sahiwal incident. He said it was a terrible tragedy for the whole nation and asked his fellow parliamentarians to stop using it to score political points.
His speech was met with shouts and interruptions from the opposition. He highlighted the government’s performance in the investigation and said they will not be shielding any government officers or police officers, unlike their predecessors.
We immediately investigated the killings and a JIT was formed, which has concluded that the Khalil family was innocent and they were murdered, said Qureshi. We didn’t try to conceal things, he said, pointing a finger at the opposition.
Justice is everyone’s right, he continued. “We will safeguard this right.”
We are ready for in camera briefings in front of the media, he said, adding that the case will soon be heard in an ATC. “We won’t hide the truth from the public,” said the minister. We will conduct a fair trial and the truth will come out, he said.