ISLAMABAD: The Senate Standing Committee on Finance Wednesday expressed serious concerns over reports that the proposed money bill would stoke massive inflation in the country and even chairman Federal Board of Revenue (FBR) was not ready to commit that prices of drugs would not increase following measures suggested in the bill.
As the meeting of the finance standing committee of the Senate presided over by Senator Talha Mehmood started formal proceedings, Senator Farooq H Naek said that the poor would suffer the most from inflation as approval of this Finance Supplementary Bill, 2021 would result in price hike of everything.
He said that the government is increasing tax rates and petroleum levy under the International Monetary Fund’s pressure to bridge the shortfall in revenue.
These measures would be highly inflationary for the poor as incidence of the GST would be equal on the poor and the rich but the poor would be hurt more, while it would be providing subsidy to the rich by keeping exemptions on electric vehicles and machinery, which had nothing to do with the poor.
Senator Mussadak Malik said that the government does not have the capacity to provide targeted subsidy to the poor as the IMF was asking from it.
Senator Malik added that the GST is an indirect tax and not an income tax and its affect would be disastrous for the poor.
The FBR chairman refused to give commitment to the committee that the measures suggested in the money bill would reduce the prices of drugs, and stated, there was no commitment from him that prices of drugs would decline by 15 to 20 percent.
A while ago, during a briefing to the committee his contention was that the measures taken to regulate the pharma industry would reduce the prices of medicines by 15 to 20 percent but when members sought commitment from him that prices would come down, he refused to give any commitment.
All he stated that there is Rs700 billion pharma industry in Pakistan but it does not pay a penny of tax.
The committee decided to write a letter to the Drug Regulatory Authority of Pakistan (DRAP) to appear before the committee and brief on the definition of drugs, and delineate their categories under the Drug Act besides to define whether or not “vitamins” fall under the definition of drugs.
The committee also sought details by the DRAP on spurious drugs and unregistered pharmaceutical companies in Pakistan.
Earlier, as the meeting of the committee started, members of the opposition parties raised objection on asking the committee to make recommendations within two days instead of constitutionally allowed 14 days.
Senator Musadik Malik said before taking up the Finance Supplementary Bill 2021, there is a need to determine in how many days the committee is allowed to make recommendations as per the Constitution.
The committee decided to commence clause-wise discussion on the money bill from Thursday.
Senator Farooq H Naek said that the members wanted at least one day to read the comparative statement of the departments; therefore, the formal meetings to read the finance supplementary bill should be started from today (Thursday), instead of Wednesday.
Copyright Business Recorder, 2021