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Opponents turn soft in Senate over RGST

ISLAMABAD: After two days of sound and fury, opposition to proposed general sales tax reforms in the Senate seemed much softened up on Thursday on the eve of a vote on non-binding house recommendations.

Abdul Hafeez SheikhFinance Minister Abdul Hafeez Sheikh will wind up, on Friday, a four-day debate on both the General Sales Tax (GST) Bill and the Finance (Amendment) Bill, which proposes a flood tax for six months, before the 100-seat upper house votes on the recommendations dawn up by its Standing Committee on Finance.

The recommendations will be sent to the National Assembly, which may or may not accept them because the two proposed laws are money bills like the annual finance bill, or budget, that must be passed only by the lower house –a point emphasised by Senate Chairman Farooq H. Naek on Thursday while ruling out a point raised by opposition leader Wasim Sajjad on Wednesday.

Amid continuing criticism from some back-benchers of opposition parties and some government allies, the strongest defence of the government’s need to raise additional revenues while the country’s tax-GDP ratio had dropped to nine per cent from 14.9 per cent some years ago came from a former finance minister, Mohammad Ishaq Dar of the opposition Pakistan Muslim League-N, who also called for early action on other fronts such as loss-making state enterprises, government austerity, reintroduction of wealth tax and recovery of written-off bank loans.

He did not say if his party would eventually support the two bills that it had opposed since their introduction in parliament on Nov 12, but appeared not ruling it out as he said the government must give an assurance it would move in these fields on a fast-track basis.

Two other critics of the bills and members of the house committee on finance, Ilyas Ahmad Bilour of the government-allied Awami National Party and Haroon Khan of the Pakistan Muslim League-Q, said it would be of no use now to oppose or boycott the vote on their committee’s unanimous recommendations.

Mr Khan said the finance minister had assured the committee he would be ready to discuss the opposition’s proposals to tax agricultural incomes, despite the matter being a provincial subject, and real estate business, and, while complaining that the bills’ critics failed to give their proposals to the standing committee, said: “If they walk out tomorrow at the time of vote, how will they face the people?”

Mr Bilour told the house the government had accepted five of ANP’s 10 demands while three more were under discussion, and said: “It will be unfair not to vote for the (standing committee’s) unanimous recommendations.”

S.M. Zafar, a veteran PML-Q parliamentarian and jurist who had been associated with two military governments, seemed idealistic when he questioned the present government’s right to impose new taxes because of its perceived poor performance, saying: “No performance, no taxation”, apparently rephrasing the saying of an 18th century American politician, James Otis: “Taxation without representation is tyranny.”

Muttahida Qaumi Movement’s Abdul Haseeb Khan and Tahir Hussain Mashhadi strongly attacked the GST bill as what they saw as a precursor to a new storm of price hike despite endorsement of the standing committee recommendations with some amendments by their party’s chairman of the body, Ahmad Ali.

And so did Jamiat Ulema-i-Islam’s Maulana Gul Naseeb and Mohammad Ismail Buledi although some news reports have quoted their party chief, Maulana Fazlur Rehman, as saying before leaving on a foreign visit that he would support the new laws as a coalition partner of the government.

Sabir Ali Baloch was the only member from the ruling Pakistan People’s Party on the day to rise to support the new laws mainly on the grounds that one would end exemptions from GST given to influential sections since the introduction of the law in 1990 and the other would raise funds for the victims of the country’s worst floods this summer.

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