Criticism regarding the government imposing additional burden on the people and of a consequent rise in inflation is “baseless,” Federal Minister for Finance and Revenue Shaukat Tarin said on Thursday.
Addressing a joint press conference, flanked by Minister of State for Information and Broadcasting Farrukh Habib, Tarin said that tax revision worth Rs343 billion has been revised in the bill.
Sharing details of the supplementary finance bill, which was unveiled by the minister in the National Assembly before the press conference, he said that a Rs70 billion rebate included taxes on luxury and business items including imported fish, high-end bakery items, expensive cheese and imported bicycles.
Tax exemptions worth Rs2 billion will be removed from items of general use like personal computers, sewing machines, matchboxes, iodised salt, red chillies, and contraceptives.
“If we expect inflation to increase because of the imposition of tax on these items then they [the Opposition] are mistaken,” he said, adding that this is the “crux of the supplementary finance bill.”
“The Opposition has been spreading rumours regarding an increase in inflation because of the finance bill,” the finance minister said.
Tarin said that no sales tax will be imposed on fertiliser, imported second-hand clothes and cinema equipment.
“The agreement with the IMF is not just a matter of $1 billion,” Tarin said.
The finance minister went on to say that PTI’s manifesto says that institutions should be given autonomy, as “they cannot be strong until they are given autonomy”.
Speaking about the State Bank of Pakistan (Amendment) Bill, 2021, he said that the previous regimes kept “interfering” in the matters of the central bank.
“The Board of Governors (BoG) of SBP will be appointed on the recommendations of the government,” he said, adding that it was earlier thought the BoG will be appointed by the bank itself.
Tarin clarified, however, that it was made clear to them that this wouldn’t be possible. “How can they make their own appointments?” he remarked.
“No amendment has been made in the bill regarding the appointment of SBP’s board of directors,” he added.
Tarin underlined that central banks of all developed countries have autonomy.
Shedding light on the conditions of the IMF, Tarin said that the Fund wants them to impose sales tax “on all items”.
He, however, reiterated the government’s revision will only mean an imposition of taxes worth Rs2 billion.
“We are increasing taxes on luxury cars,” he said, adding that the Fund has not imposed any conditions regarding increasing taxes on vehicles.
Speaking about inflation, he said that the Pakistan’s inflation based on consumer price index (CPI) clocked in at 11.5% in November 2021.
“Inflation in the US and UK also surged to record highs, so if I have failed have Joe Biden and Boris Johnson also failed?” he asked.
The minister also asked that if prices of edible oil in the international market are increasing he should stop importing the essential commodity, or if the price of coal is rising the government should stop importing that as well.
Tarin assured the media that prices of medicines will go down.
Shedding light on future plans, he said that the government is working on “documents that will be historic”.