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ISLAMABAD: Despite its efforts to speed up the passage of fiscal measures mandated by the International Monetary Fund (IMF); the government was forced to return to parliament on Tuesday after President Arif Alvi “advised” Finance Minister Ishaq Dar to take parliament into confidence over the Rs170 billion in new taxes levied.
Following the president’s ‘refusal,’ a cabinet meeting was called to approve the tax modification measure, Finance Bill 2023, which would be tabled in both chambers of parliament on Wednesday (today), according to a statement issued by the PM Office following the meeting.
The statement went on to say that an ‘austerity package’ aimed at government spending was also nearing completion.
Interestingly, just hours before Finance Minister Ishaq Dar were allegedly ignored by the president, National Assembly Speaker Raja Pervez Ashraf deferred a joint session of parliament till February 28.
It is a race against time for the administration, which wants to adopt tax measures by Feb 15 in order to secure the early delivery of an IMF tranche critical to replenishing depleting foreign exchange reserves.
Given the gravity of the situation, the National Assembly and Senate will convene tonight in this evening to discuss the measure.
The President’s Office announced on Twitter that both houses of parliament had been summoned to meet today (Wednesday).
ریاست ِپاکستان حکومت کی جانب سے آئی ایم ایف کے ساتھ کیے گئے وعدوں پر قائم رہے گی، صدر مملکت
— The President of Pakistan (@PresOfPakistan) February 14, 2023
حکومت ایک آرڈیننس جاری کرکے ٹیکسوں کے ذریعے اضافی ریونیو اکٹھا کرنا چاہتی ہے، وزیر خزانہ
اس اہم موضوع پر پارلیمنٹ کو اعتماد میں لینا زیادہ مناسب ہوگا ، صدر مملکت pic.twitter.com/kTcpx9VctA
Mr. Dar was also scheduled to speak to the media that evening; however, the finance ministry afterward issued a statement announcing that the media appearance had been canceled and that the bill for new tax measures will be submitted in parliament today.
Initially, the government intended to implement “tax and non-tax measures” to raise Rs170 billion in funds. However, in a last-minute shift, it opted to withdraw ideas for non-tax measures, including an Rs100 billion flood levy.
In a late-night development, the Federal Board of Revenue (FBR) issued SRO178 to boost a federal excise charge on locally manufactured cigarettes which would generate up to Rs60bn in taxes on tobacco items.