Senate Standing Committee on Finance has recommended to the government to withdraw the recently imposed additional 5% GST on petroleum products. "No one should have the power to increase tax in the presence of parliament and this must be conveyed to the government," stated the committee chaired by Senator Nasreen Jalil with a majority vote. The ruling party's senator Rafique Rajwana did not agree with his colleagues and gave a dissenting note to the recommendation.
The practice of levying taxes through an executive order must end now, the committee maintained; and decided to request Finance Minister Ishaq Dar to clarify to the committee whether he can increase GST by 5 per cent as some members contended that an increase in GST through an SRO may raise a constitutional question and the matter can land in the Supreme Court.
Senator Osman Saifullah added that individual senators can go to court against a 5% increase as it is their right as citizens of Pakistan. Sughra Iman asked the Finance Ministry to provide a cost benefit analysis of the oil price decline in the international market on the country's economy. The Finance Ministry and Federal Board of Revenue (FBR) have focused on losses on account of revenue and not on savings due to a price decline, she added. She further stated that petroleum prices began declining in the international market in August 2014 but the government decided to pass on partial benefit to consumers in October 2014 with a lag of three months.
Senator Haji Adeel said that government should have slashed its expenditure instead of imposing an additional GST on petroleum products. There is no justification for staying in the most expensive hotels during foreign visits when the country is facing financial problems, he added. The government should have decreased fuel surcharge keeping in view the decrease in petroleum prices and if the economy has suffered due to lower prices, instead of imposing GST, the government should lower its travel expenses, Haji Adeel said.
The committee decided that its members will participate in the meetings of Oil and Gas Regulatory Authority (OGRA) which are held to determine prices on a monthly basis. Chairman OGRA, Saeed Ahmed, expressed his support for this proposal. The committee expressed strong reservations over the absence of a quorum of sitting members in the Authority. Senator Fateh Muhammad Hasani said that the country has suffered a lot because of some unlawful actions and decisions of OGRA.
To this, Chairman OGRA stated that the Authority has not taken any unconstitutional or unlawful decision as the decision-making process has been abandoned since 2013. Senators expressed dissatisfaction over this statement and Senator Kalsoom Parveen said that the Authority does not have enough sitting members to decide any matter. Saeed Ahmed while clarifying his position said that the Authority has not taken any decision after being restrained by the Lahore High Court.