National Assembly unanimously approves much-needed mini-budget

The mini-budget’s approval comes as the government continues its talks with the IMF.

National Assembly unanimously approves much-needed mini-budget. The National Assembly Monday unanimously approved the government’s much-needed Finance (Supplementary) Bill 2023 or ‘mini-budget’ — a move mandatory for seeking $1.1 billion tranche of the International Monetary Fund (IMF) loan.

The mini-budget’s approval comes as the government continues its talks with the IMF, the international lender, while adhering to its conditions to help cushion Pakistan’s dwindling economy.

Finance Minister Ishaq Dar told the lower house of parliament that a few amendments have made to the bill which includes an increase in excise duty on business class air travel abroad.

Before the mini-budget’s approval, Dar — while speaking on the floor of the National Assembly — said the government appreciated recommendations by lawmakers for the bill and thanked the house for participating in debate regarding the bill. He also said the government considered recommendations shared by the parliamentarians.

The finance czar further added the government introduced the mini-budget following the IMF’s conditions. “We also don’t like imposing taxes. We tried keeping a minimum rate of additional taxes.”

Earlier today, State Minister for Finance Aisha Ghaus Pasha said the Finance (Supplementary) Bill 2023 was likely to be approved today by the NA.

The minister added that the government decided to get the mini-budget approved by the lower house today. It should be noted that it was already approved in the Senate by a thin margin.

“Virtual discussions with the International Monetary Fund (IMF) are ongoing and talks will also take place today,” the minister said while speaking to journalists in Islamabad.

Pasha hoped for a staff-level agreement to materialise with the IMF soon. “Matters with the IMF are progressing in a positive direction. A further delay in the agreement is unlikely.”

Dar tabled the bill in the National Assembly and Senate on February 15 with budget proposals presented seeking to fulfil the prerequisites for unlocking the crucial $1.1 billion IMF loan tranche which will help cushion the country’s dwindling economy.

A session of the lower house, to debate over the finance bill, was held on Friday (February 17); however, it was adjourned without voting after a brief debate on the budget proposals.

“The NA session has been adjourned to meet again on Monday, the 20th February 2023 at 5:00 pm,” it was announced on the official Twitter handle of the lower house.

Dar, while speaking to reporters after the session, said that he expects the bill to be passed in both houses by Monday or Tuesday as Senate Chairman Sadiq Sanjrani has “given us till Friday”.

Pakistan is in dire need of funds as it battles a wrenching economic crisis as the State Bank of Pakistan (SBP)-held foreign exchange reserves barely cover one month of imports.

Finance bill proposals

Increase in GST on luxury items from 17% to 25%
FED on business and first-class air tickets be increased to Rs20,000 or 50% — whichever is higher
10% withholding adjustable advance income tax to be imposed on marriage halls
Increase in FED on cigarettes, soft and sugary drinks
FED on cement to be raised from Rs1.5 kg to Rs2 kg
Increase in GST from standard 17% to 18%
GST to not be imposed on essential goods — wheat, rice, milk, pulses, vegetables, fruits, fish, eggs, meat
BISP stipend to be increased; govt to allocate Rs400 billion for programme