Huzaima Bukhari and Dr Ikramul Haq

The adoption of the Finance Bill 2017 on June 15, 2017 by members of the ruling party using the disgusting tool of majoritarianism, ignoring sane voices for sound tax policy needs, once again confirms the amount of contempt Pakistan Muslim League (PML-N) has for responsible democratic dispensation. It also reflects the apathy of the elected members towards economic growth and improving the overall conditions of the poor.

The government of PML-N was adamant to pass the Finance Bill 2017 without any meaningful debate. Taking advantage of boycott of Opposition, it conveniently chose to overlook their suggested amendments and those proposed by Senate as well as independent experts.

As expected, parliamentarians of the ruling party merely acted as rubber stamps. The Finance Bill 2017, handiwork of tax bureaucrats sitting in the Federal Board of Revenue (FBR), was not only passed in routine, as has been done every year, but gross violations of the Constitution were also committed. Interestingly, nobody in the National Assembly or Senate was ready to take FBR’s top management to task on account of their incompetence to collect even Rs. 3500 billion against actual potential of Rs. 8500 billion although the target was just Rs 3900 billion.

According to media release of Free and Fair Election Network (FAFEN), National Assembly passed the fifth budget of the ruling party during its 43rd session that spanned just over 15 sittings. The general discussion on the budget consumed nine sittings with 68 lawmakers (20%) taking part in it. Last year, the budget debate continued for 11 sittings. The overall duration of the budget session was also reduced to less than half of last budget session. The duration of the current budget session was 37.4 hours while the budget session during last year continued for 80.2 hours. Moreover, the average delay in the commencement of sittings witnessed a surge from 10 to 38 minutes. This shows the level of apathy of our legislators in attending important budget session, what to speak of contributing towards productive and quality debate.

The FAFEN adds that the House took two days to approve the current and supplementary Demands for Grants. The government moved 150 Demands for Grants for the upcoming financial year (2017-18) and 124 Demands for Grants for the financial year ending on June 30, 2017. The opposition lawmakers submitted 1,704 Cut Motions on these demands; however, none of those was moved due to the absence of the relevant lawmakers from the budget proceedings. In addition to the Finance Bill, the House considered two government and nine Private Members’ bills. One of the government bills, the Companies Bill, 2017 was passed while the others were referred to the relevant committees for review.

The Finance Minister, as in the previous years, seems to have committed gross violations of the Constitution and none of the members of ruling party raised his or her voice by resisting the amendment in the Fiscal Responsibility and Debt Limitation Act, 2005 that could not be made part of Money Bill and required approval of Senate as well. This amendment saying that “total debt of the Government is public debt less accumulated deposits of the Federal and Provincial Governments with the banking system” was not even approved by the Cabinet in violation of law laid down by the Supreme Court in Messers Mustafa Impex, Karachi v Government of Pakistan (2016) 114 Tax 241 (S.C Pak.). Securing an amendment in the Fiscal Responsibility and Debt Limitation Act, 2005 (a law originally passed by both the Houses) through the Finance Bill, in utter disregard of the Constitution, once again reflected sadly on the mindset of PML-N leadership that has always been keen to violate the supreme law of the land as well as established laws and rules.

The Finance Act 2017 also contains provisions to nullify the judgement of the Supreme Court in Messrs Mustafa Impex, Karachi v Government of Pakistan (2016) 114 Tax 241 (S.C Pak.). It could not have been done through Money Bill but the National Assembly did so blatantly on June 15, 2017 by inserting the following provisions:

Customs Act, 1969 [section 221A]

Validation.-All notifications and orders issued and notified in exercise of the powers conferred upon the Federal Government, before the commencement of Finance Act, 2017, shall be deemed to have been validly issued and notified in exercise of those powers, notwithstanding anything contained in any judgment of the High Court or Supreme Court.

Sales Tax Act, 1990 [section 74A]

Validation.– All notifications and orders issued and notified in exercise of the powers conferred upon the Federal Government, before the commencement of Finance Act, 2017, shall be deemed to have been validly issued and notified in exercise of those powers, notwithstanding anything contained in any judgment of the High Court or Supreme Court

Income Tax Ordinance, 2001 [section 241]

Validation. — All notifications and orders issued and notified, in exercise of the powers conferred upon the Federal Government, before the first day of July, 2017 shall be deemed to have been validly issued and notified in exercise of those powers.

Federal Excise Act, 2005 [section 43A]

Validation.– All notifications and orders issued and notified in exercise of the powers conferred upon the Federal Government, before the commencement of Finance Act, 2017, shall be deemed to have been validly issued and notified in exercise of those powers, notwithstanding anything contained in any judgment of a High Court or the Supreme Court.

The above insertions clearly show the level of disrespect of the present regime towards the Constitution and verdicts of the highest court of the country. What makes the situation worse is the criminal silence of even experienced parliamentarians of the ruling party fully conversant with law that the only remedy to undo the verdict of Supreme Court in Messrs Mustafa Impex, Karachi v Government of Pakistan (2016) 114 Tax 241 (S.C Pak.) was amendment in the Constitution itself and not through Money Bill.

(The writers, lawyers and partners in HUZAIMA, IKRAM & IJAZ, are Adjunct Faculty at Lahore University of Management Sciences)