IT is, perhaps, for the first time that despite paucity of time and resources, the relevant standing committees of both the National Assembly and the Senate carried out a detailed post-mortem of the budget for the next financial year, rejecting some of the highly controversial proposals and giving meaningful input to make the document reflective of the aspirations of the common man and different segments of the society.
Former Finance Minister and PPP stalwart Syed Naveed Qamar has aptly stated that the Parliament has made history by reviewing the 2025-26 budget word by word through its standing committees on finance and revenue.
It is a reality that the budget-making process traditionally remained a prerogative of bureaucrats and parliaments generally rubber stamped the proposals due to lack of capacity for comprehensive scrutiny of the complex documents. Relevant rules were recently amended allowing committees from both houses to read the Finance Bill meticulously, calling in experts and officials to better understand the data and narrative. This has allowed the committees to grasp the true nature of different proposals, their impact and implications and make suggestions for improvement. Media reports suggest the standing committees of the two houses have given their valuable input and hopefully this will be accommodated by the National Assembly during passage of the budget. To give an idea, the two bodies have vehemently opposed imposition of 18% GST on import of solar panels and recommended raising the threshold limit for purchases made by “eligible individuals” — a new term for people who file their tax returns – by 400% as against 130% (of the wealth reflected in the last year’s wealth statement) proposed in the budget speech. After thorough debate, the Senate Committee also rejected tax on e-commerce criticizing the Government’s approach for targeting online businesses instead of traditional retailers. The NA Committee has approved the proposal seeking to restrict unregistered businesses from operating bank accounts and to disconnect their electricity and gas connections. If implemented in letter and spirit, the proposal has the potential to help expand the tax net meaningfully as out of the 300,000 industrial units operating in Pakistan, only 30,000 to 35,000 were currently registered with the FBR. While appreciating the healthy input given by the two committees, we would recommend implementation of the proposal mooted by Syed Naveed Qamar to make the process of parliamentary scrutiny of budget more relevant. He proposed setting up a parliamentary budget office staffed by specialists so that it begins review of potential proposals months ahead.
