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Wednesday, July 24, 2024  
18 Muharram 1446  

SBP autonomy, Sales Tax exemptions: PTI allies drag their feet over key draft bills

ISLAMABAD: Allies of the ruling party, Pakistan Tehreek-e-Insaf (PTI), have conveyed to it that they would first...

ISLAMABAD: Allies of the ruling party, Pakistan Tehreek-e-Insaf (PTI), have conveyed to it that they would first review two crucial bills — grant of autonomy to State Bank of Pakistan (SBP) and withdrawal of sales tax exemptions of Rs330 billion— and then decide, accordingly.

Presently, mystery shrouds the fate of the two bills as Prime Minister Imran Khan and his aides have shared the draft of the bills with only a handful of the cabinet members, Business Recorder has learnt.

“I have not seen those bills. When the bills are shared with us, then we’ll see and decide what to do,” Pakistan Muslim League-Quaid (PML-Q) Secretary General Kamil Ali Agha told Business Recorder.

“This issue would be taken up by the party in its internal forums, but for that purpose, we need to be taken into the loop regarding those bills; only then will I be able to say anything about it,” he added.

Convenor Muttahida Qaumi Movement-Pakistan (MQM) and Member National Assembly Khalid Maqbool Siddiqui also maintained that the party would decide on the bills once their content is shared with them. “Right now, we have absolutely no idea what these bills are all about,” he added.

A coalition leader, requesting anonymity, said that PM’s close aides assigned to financial matters have approached some coalition leaders regarding the two bills. “We made it clear that we needed to be briefed by none other than the PM himself regarding the proposed autonomy to SBP and withdrawal of tax exemptions that are being undertaken at the behest of International Monetary Fund (IMF). We are yet to hold a meeting with the PM on the matter,” he added.

The source said that the government has removed those clauses from the draft SBP bill that would have required a two-third majority for its passage from parliament and retained only those clauses that require a simple majority — keeping in view that the government lacks two-third majority in Parliament.

“We have no concrete information regarding the bills but there’s a lot of guesswork going on — that the government has made major changes in the SBP bill keeping in view its strength in Parliament,” the source said.

PM’s Finance Advisor Shaukat Tarin reportedly invited the Law Minister to brief the IMF team on the parliamentary strength of the government which makes the passage of a constitutional amendment. As there was no such strength, subsequently, the Law Minister has to revise the draft after evaluating its pros and cons, it is learnt.

This was confirmed by Tarin who informed members of the press recently that substantial changes were made in the draft agreed with IMF earlier and when asked for specific details added cryptically , “one would be able to find out the changes after comparing the draft agreed with the IMF with the initial one.”

Business Recorder has also learnt that the draft of the Tax Laws (Fourth) Amendment Bill 2021 have been finalised and vetted by the Law Division for withdrawal of Rs330 billion sales tax exemptions and zero-rating.

According to sources, Secretary Revenue has not yet moved a summary to the federal cabinet for approval of the Tax Laws (Amendment) Bill 2021. However, once Finance Ministry gives a go-ahead to the Federal Board of Revenue, Secretary Revenue will move the summary to the federal cabinet which is likely to be approved during a cabinet meeting or circulation to cabinet members.

The FBR has not yet taken a final decision on the imposition of 17 percent sales tax on mobile phones, stationery items/ writing instruments and certain packaged food items under the draft Tax Laws (Fourth) Amendment Bill 2021.

Sources said that the Chairman FBR Dr Ashfaq Ahmed also held a meeting on the draft of the Tax Laws (Fourth) Amendment Bill 2021 with his team of members on Monday (yesterday).

Sources in the Finance Ministry also confirmed that the bill has been finalized after exchange of drafts with the IMF and detailed discussion with the government’s economic and legal teams.

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Shaukat Tarin

Sales Tax