Huzaima Bukhari & Dr. Ikramul Haq
“Pakistan affirmed its commitment to the 2030 Agenda for Sustainable Development by adopting the Sustainable Development Goals (SDGs) as its own national development agenda through a unanimous National Assembly Resolution in 2016. Since then, the country has made considerable progress by mainstreaming these goals in national policies and strategies, including the Five-Year Plan, provincial growth strategies and Pakistan’s long-term development perspective. In 2018, the newly elected Government designed and approved a National SDGs Framework that envisages a national vision to prioritize and localize SDGs”—Pakistan’s Implementation of 2030 Agenda for Sustainable Development
The Pakistan Tehreek-i-Insaf (PTI), on assumption of power on August 18, 2018 in the Centre with the help of coalition partners, after general elections held on July 25, 2018, like its predecessors, has been issuing Presidential Ordinances at a speed, which is unprecedented in the history of Pakistan—civilians governments since 2003 have turned into “Ordinance” factories. Legislative work requires research, debate, informed decision making after taking proper input from stakeholders and experts in the field. This has not been the case in Pakistan, as for decades we were under military rules. However, expectations of the people that after restoration of civilian rule in 2008 on exit of General Musharraf, things will change for the better has resulted in disappointment on seeing that even after having three consecutive democratic governments, the legislation still remains dependent largely on Presidential Ordinances.
The main reason behind it as far as the PTI Government is concerned, may be lack of majority in the Senate where every bill must go, except Money Bills (only for non-binding comments), as elaborated in Article 89 read with Article 73 of the Constitution of Islamic Republic of Pakistan [“the Constitution’] as amended by the Constitution (Eighteenth Amendment) Act, 2010, [commonly called 18th Amendment].
In this article, we are explaining the procedure for legislation and why the civilian governments since 2008 have failed to adhere to the Constitution. From the day, Prime Minister, Imran Khan, took oath, and even after obtaining vote of confidence on March 6, 2021 and winning elections of Chairman and Deputy Chairman of PTI-supported candidate, there remains uncompromising animosity with Opposition, rather serious personal clashes, not based on sincere differences on policies, but to settle personal scores.
The blame does not rest solely on Imran Khan, but heads of two leading parties and others now united under the banner of Pakistan Democratic Movement (PDM) with a one-point agenda of dismantling yet another government labelling it as “selected” and “not elected” and involving armed forces unnecessarily in political affairs as was done by Imran Khan during his rallies and longest Dharna (sit-in) during the last regime, though he failed to stop them to complete the tenure of 5 years. The politicians should allow Imran Khan to complete the term and refrain from creating political instability that is harmful for already economy in mess. They do not understand that they must respect the mandate of voters and abide by the Constitution, Article 5(2) which categorically says: “Obedience to the Constitution and law is the inviolable obligation of every citizen wherever he may be and of every other person for the time being within Pakistan”.
The perpetual violations of the Constitutions were highlighted in many articles, Unconstitutional amnesties, TNS, [Political Economy] The News, January 31, 2020, The unconstitutional income taxation, TNS, [Political Economy] The News, December 6, 2020, Lawmakers or lawbreakers?, General’s ‘general law’ v ‘special law’, Business Recorder, December 18, 2020, Daily Times, December 19, 2020, Constitution and tax codes—I, Business Recorder, January 29, 2020 and Constitution and tax codes—II, Business Recorder, January 30, 2020 and many others [visit links at the end of the article below for info about the writers]. Through Money Bill, asset-whitening schemes with complete confidentiality were given by Pakistan Muslim League-Nawaz (PML (N) in 2018 in violation of Article 19A of the Constitution and the same was done by PTI by giving one in 2018 and the other in 2019 and then extended it on last day of 2020—complete details and their unconstitutionality are discussed in Unconstitutional asset-whitening schemes & amnesties, Surkhyian, January 7, 2021Pakistan. The following was highlighted in it:
“How could ill-gotten money created through corruption become kosher after 10 years in the hands of public officeholders and employees of State? It is worth-mentioning that the National Accountability Ordinance, 1999 applicable from January 1, 1985 was ignored by PMLN under Foreign Assets (Declaration and Repatriation) Act, 2018 and Voluntary Declaration of Domestic Assets Act, 2018 and then by the PTI Government first through Assets Declaration Ordinance, 2019 and then by Assets Declaration Act, 2019. However, nobody took note of it. If the National Accountability Ordinance, 1999 was draconian and reflective of legacy of a dictator, meant for political revenge, why did not Pakistan Peoples Party and PMLN repeal it during the Decade of Democracy [2008-18]? What prevented them to bring a new law and also to include generals and judges—in fact all powerful segments in its ambit liable to be probed by an autonomous agency answerable directly to Parliament”.
On April 18, 2018 (Friday), Imran Khan became elected Prime Minister, backed by 176 members. His opponent, PML(N) President, Shahbaz Sharif, received 96 votes. In his maiden speech to Parliament, after taking oath, then 65-year-old Premier, “reiterated his campaign promise to hold “corrupt” politicians to account and to improve opportunities for young people”.
The menaces of corruption, horse-trading, and various financial crimes have been persisting unabated in Pakistan for decades and the PTI Government since 2018 has also failed to uproot them. The issue is not mere acceptance of existence of these widespread corrupt mechanisms, including misapplication of public funds, change of loyalties in violation of law by holders of representative offices for political and personal gains, self-aggrandisement by the Government functionaries, local and statutory authorities functioning under political masters, as done by Premier, Imran Khan, but how to end these menaces?
The policy of appeasementtowards corrupt practice, looting and plundering of national wealth, spread over the last many decades, has culminated in the syndrome of defeatism that “nothing can be done”, hence amnesties! In other words defeatism has become a national malady—where the beneficiaries of tainted money successfully shift the entire blame on weak administration and existing laws. The Federal Board of Revenue (FBR) lost huge tax base and collection due to frequent amnesties as highlighted in Amnesties & tax losses, Surkhyian, November 13, 2020 and Legislators, declarations & accountability, Surkhyian, January 20, 2020
In the wake of Senate election on March 3, 2021 and allegations of corruption by rival politicians against each other, the voters are further disillusioned with the conduct of party leaders and elected representatives. They are stunned that the Prime Minister in his televised address on March 4, 2021 admitted: “Many PTI members were bought”. This statement and leakages of videos of 2018 and 2021 of Senate elections of horse-trading has discredited the entire system. After confession by the Premier of electoral corruption and evidence available, the culprits must face criminal proceedings. Mere expulsion of defiant or allegedly corrupt members from PTI by the Premier in 2018 has proved ineffective.
Perpetual violation of laws and committal of corrupt practices by some elected politicians defy all norms of democracy. These undesirable practices are not confined to any particular political party. In theory, Pakistan is a constitutional democracy, but in practice it is an embodiment of kleptocracy. Favouritism, nepotism, corruption and using money or other tactics to secure change of political loyalties have been part of our political culture/governance under both military and civilian rules alike.
The agencies responsible to combat these menaces, National Accountability Bureau (NAB), provincial anti-corruption departments, Federal Board of Revenue, Federal Investigation Agency and Election Commission of Pakistan (ECP), have all failed to perform their duties. They have never bothered to establish a joint task force to counter financial crimes posing serious threat to our internal security and hampering economic growth.
In the presence of financial and intellectual corruption, the successful vote of confidence securing 178 votes on March 6, 2021 by Premier and success of PTI-supported Chairman and Deputy Chairman of Senate held on March 12, 2021, have become meaningless.
The Prime Minister is treating those allegedly engaged in horse-trading/corruption as mere turncoats instead of as criminals, to be punished suitably. The Premier keeps on admitting that some members of PTI were bought. If this is the case, there is evidence of abetment by not asking NAB to investigate and take action after due process of law. Now after the defeat of Senator Yousaf Raza Gilani as unanimous candidate of PDM, the same allegations are levelled against the PTI. Both PTI and PDM are accusing each other of corrupt practices. PDM is also involving state institutions in their defeat (unfounded and not supported by any evidence). The Pakistan Peoples Party (PPP) and PML(N) must look into the behaviour of their leaders as narrated below:
Mian Muhammad Nawaz Sharif, convicted/disqualified ex-Prime Minister of Pakistan, in a private gathering, reportedly said: “Even if my assets do not commensurate with my sources, it is none of your concern”. Coming from a three-times elected Prime Minister, this was really shocking. Same was the attitude of Asif Ali Zardari, ex-President of Pakistan, when he told a show host, “the authorities will have to prove that I went to open fictitious bank accounts in the name of some milkman or sweetmeat seller, only then can a case be registered against me…..Even then, I can defend the case….Yes I have deposited money in this account, it is my wish“. When the show host asked the former president, “What about the poor fellow who has no idea about any of this”, he responded: “Then it is his fault“.
The above statements by two persons holding high public offices testify to our prevalent decadent political culture as well as acceptance of corruption as a way of life. Are these leaders elected to openly challenge NAB by claiming: “you have no right to make us accountable as this right lies with the people of Pakistan”.
Now it is for the voters to decide whether to keep on electing them or finally, reject them. The powerful in Pakistan not only make mockery of laws, but also squander tax money for self-aggrandisement. They enjoy unprecedented tax-free perquisites and benefits, foreign visits and luxurious living at the expense of the national exchequer. The institutions that have to generate taxes, check corruption, make public officeholders accountable and safeguard public funds, are captive in their hands.
It is universally accepted that democracy and rule of law go hand in hand and without transparency and accountability both remain mere clichés. It is a constitutional obligation for persons aspiring for membership of Senate or assembles to be honest and sagacious. The Supreme Court of Pakistan in Workers’ Party Pakistan & Others v Federation of Pakistan & Others [PLD 2012 Supreme Court 681] held: “All public power is a sacred trust, which is to be exercised fairly, justly, honestly and in accordance with law”.
The starting point of across-the-board accountability in Pakistan should be making public declaration of assets/liabilities by judges and high-ranking civil/military officials—like those of politicians that are published annually in the official gazette.
The civil society and media should join hands to force the Parliament to abolish all laws of secrecy and/or immunity and enact a law in terms of Article 19A of the Constitution for compulsory disclosure of assets/liabilities/taxes paid by judges/generals/high-raking civil officers. In 2020, members of Women’s Action Forum (WAF) sought under the Right of Information Act, 2017, information regarding assets, salaries and perks of honourable judges of Supreme Court and High Courts as well as of military leadership. However, none responded, except Justice Qazi Faez Isa, who provided the details. [Read more about the ongoing case of Justice Qazi Faez Isa at https://www.thenews.com.pk/tns/detail/803706-a-process-of-accountability]
Exemplary punishment should be awarded to all holding public office, members of services, or holding any constitutional position, as custodians of public trust, if they commit corruption or are found guilty of wrong declarations of their assets/liabilities or avoid paying any dues (taxes and/or others).
The main job of the legislators is to pass laws to protect public rights, ensure welfare for all, especially the less-privileged and provide effective justice system safeguarding that rule of law and transparency are key to counter private interests over public interests. On the contrary, since 2008, all successive governments have shown formidable resistance against establishment of an independent anti-crime authority, as National Crime Agency of United Kingdom. We follow its model of democracy but when matter comes to accountability, defy it with impunity.
All in power and in opposition know that such a body would expose their corruption and other malpractices—especially the command of the Constitution under Article 17(3) saying: Every political party shall account for the source of its funds in accordance with law.
It is shocking that only two political parties filed income tax returns for tax year 2020 out of 27 registered with FBR and 127 with Election Commission of Pakistan despite section 114(1)(ac) of the Income Tax Ordinance, 2001 that makes it mandatory. How can we expect rule of law in Pakistan, when 125 political parties are committing flagrant violation of Article 5(2) of the Constitution? They keep on bashing FBR but fail to fulfill the commands of the Constitution.
None of the political parties is ready to disclose the names of its members giving regular contributions and those financing their election campaigns, rallies, and financing processions, protests and dharnas (sit-ins)as well as lavish breakfasts, lunches and dinners. When the political parties are not abiding by the supreme law of the land, what can be expected from them to establish rule of law and inspire all citizens to pay their taxes diligently. The way forward is that political parties should be forced under law to file income tax returns disclosing names of contributions by members, donors and financiers. Once this is made mandatory, they would have no option but select for elections only those candidates providing truthful tax declarations. The process of filtration within the parties is a necessary step towards transparent and fair process of electioneering as ordained in various provisions of the Constitution.
The Premier’s blame of not tracking the secret ballot by the ECP is against Article 226 of the Constitution. If, according to him, some PTI members were bought, he should put his own house in order sending their cases to ECP and NAB for disqualification/punishment under the law. The nation expects proper legislation by all elected, but as they are least pushed to follow the Constitution, resultantly, the coalition government has been relying on Presidential Ordinances.
The PTI Government on February 11, 2021 issued second Presidential Ordinance VI of 2021 [Tax Laws (Amendment) Ordinance, 2021] inserting new provisions and amending the existing ones in all the tax codes—Income Tax Ordinance, 2001, Sales Tax Act, 1990, Customs Act, 1969 and Federal Excise Act, 2015—without any public debate and bypassing the National Assembly and Senate. The same was done with the Presidential Ordinance II of 2021 [The Income Tax (Amendment) Ordinance, 2021], issued on January 20, 2021 with retrospective effect (January 1, 2021), just 48 hours before the start of sessions of National Assembly and Senate. It was published in the official gazette as late as January 22, 2021. This was reportedly tabled before the National Assembly on March 1, 2021 after endorsement by Standing Committee and sent to Senate for comments. In normal circumstances legislation even through ordinances, which becomes a bill before Parliament by deeming provision, needs to be considered on the very first day it is presented before either House if not a money bill. In the case of money bill, the constitutional requirement is that it must also be conveyed to the Senate for recommendations within 15 days. It is surprising that according to press reports, International Monetary Fund (IMF) is pressing passage of money bill withdrawing exemptions even ignoring the constitutional provisions by giving deadline of March 24, 2021 for release of held-up tranche. The lenders have no business to impose such undesirable conditions but the fault lies with our own leaders who claim to break the begging bowl in public but in practice bow before international lenders. In this background the PTI Government has hurriedly prepared a finance bill (in terms of Article 73 of the Constitution) without any public debate and seeking rationale behind withdrawing certain corporate exemptions on the dictates of IMF, while retaining many that are related to militro-judicial-civil complex, Prime Minister, ministers, state ministers, advisers, chief ministers and governors.
In CIT v Eli Lily (Pvt) Ltd (2009) 100 Tax 81 (S.C. Pak), Justice Ch. Ijaz Ahmad in Para 3 of his note held as under:
“Taxing laws in particular must be framed in such a manner that people of Pakistan themselves voluntarily pay the taxes encouragingly and honestly. Such a motivation can only be infused among the people by eliminating the fear of being exploited by the machinery and income tax authorities. Such motivation will encourage our people to join the list of taxpaying nations consequently stabilizing the financial position of the state helping Nation get rid of IMF and World Bank. Fixing upper and lower tax limits for all occupants, industrialists and professionals other than salaried people will help inculcate a sense of responsibility and an encouragement among the people. Having achieved the maximum tax limit, the rigours of law should not touch the assessees. Once this legal technique is adopted, every person shall try his level best to reach the maximum level rather than avoiding paying the tax. This formula will also eradicate social evils of concealing, lying and erroneously submitting income tax returns resultantly providing a better and stronger social system…..”
[Emphases are supplied]
The principle of “no taxation without representation”, embodied in Article 77 read with Article 162 of the Constitution, has been perpetually and flagrantly violated in Pakistan—a lamentable act that remains unnoticed at all levels. The prime culprits are members of parliaments who have been delegating their legislative power of levying taxes to the federal government (through FBR). This is in utter violation of Constitution and the decisions of the Supreme Court cited above. Authority to issue Statutory Regulatory Orders (SROs) for extending any kind of exemption or concession in respect of any tax is gross violation of Article 162 of the Constitution which says:
“162. Prior sanction of President required to Bills affecting taxation in which Provinces are interested: – No Bill or amendment which imposes or varies a tax or duty the whole or part of the net proceeds whereof is assigned to any Province, or which varies the meaning of the expression “agricultural income” as defined for the purposes of the enactments relating to income-tax, or which affects the principles on which under any of the foregoing provisions of this Chapter, moneys are or may be distributable to Provinces, shall be introduced or moved in the National Assembly except with the previous sanction of the President.”
Delegating power to an executive authority to frame laws or issue SROs is in utter violation of Article 162 as Parliament itself is not authorised to consider any Bill or amendment that imposes or varies a tax or duty, the whole or part of the net proceeds whereof is assigned to any province, unless the same is first approved by the President. Exercise of delegated powers by FBR to vary a tax or duty through SROs is a blatant violation of Article 162 which has never been challenged and even no suo moto action is ever taken by the apex court that is supposed to interpret and enforce the Constitution—this confirms our intellectual bankruptcy in understanding and implementing the supreme law of the land.
Enforcement of Rule of Law determines the failure or success of democracy in any society. In the context of tax laws, it means that taxes are imposed through parliamentary process, rather than through administrative discretions (SROs). The language of Article 77 of Constitution is couched in negative starting with the word “no”. It excludes all others to levy any tax. It shall and can only be levied for the purposes of the Federation and that too by or under the authority of the Act of Parliament.
In the past, many FBR stalwarts [retired Member Policy, Dr. Muhammad Iqbal et al] have been insisting that the words “by or under the authority of Act”, as used in Article 77 of the Constitution, authorise “taxation by delegation” as well which they considered justified doing so through Statutory Regulatory Orders (SROs). However, before the Supreme Court in Messers Mustafa Impex, Karachi v Government of Pakistan (2016) 114 Tax 241 (S.C Pak.), Additional Attorney General submitted”
“……the levy and exemption of tax is the function of Parliament under Article 77 of the Constitution and…… power of exemption if given to the executive per se, would amount to the negation of the doctrine of parliamentary supremacy and the doctrine of separation of powers”.
The above submission was against the view of FBR and was confirmed by the Apex Court. Irritated by the judgement of the Honourable Supreme Court, the tax babus sitting in FBR, who always hoodwinked the Finance Minister Ishaq Dar or he himself was party to such unconstitutional measures, inserted amendments through Finance Act 2017 in Customs Act, 1969 [section 221A], Sales Tax Act, 1990 [section 74A], Income Tax Ordinance, 2001 [section 241] and Federal Excise Act, 2005 [section 43A] to nullify the judgement of Supreme Court in Messers Mustafa Impex, Karachi v Government of Pakistan (2016) 114 Tax 241 (S.C Pak.).
The textofall the above-mentioned amendments was almost the same: “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”. One wonders what kind of wizards of FBR and Ministry of Law had approved/vetted these amendments.
Article 77 of the Constitution, as enunciated by Supreme Court, could not be bypassed through such amendments in subordinate laws? These, in fact, amounted to contempt of court. The then Law Minister and Attorney General of Pakistan, both seasoned lawyers, should have advised the then Finance Minister, now a fugitive and absconder, to withdraw them as the only remedy was a constitutional amendment and not mere insertion of validation clauses in subordinate laws, but they failed to do so.
Things have not changed much even under the PTI Government. On June 26, 2020 and to utter surprise and dismay of all, the government increased prices of all petroleum products substantially—usually done after 15 days of each month after a summary is submitted by the Oil and Gas Regulatory Authority (OGRA) for increase or decrease. This time there was no prior intimation, no summary from OGRA and everyone was taken aback when only a few days back the Prime Minister was taking pride in passing out benefit of lower prices to the masses and after shortage ordered inquiry into the matter. Reportedly, the Federal Board of Revenue (FBR) even started stocktaking of the oil companies.
According to a brief statement issued by the Finance Division, the rise in prices of petroleum products was “in view of the rising oil prices trend in the global market”. The increase per litre was overwhelming: Petrol (motor spirit) by Rs. 25.58, from the existing Rs. 74.52, high-speed diesel by Rs. 21.31 from Rs. 80.15, kerosene oil raised by Rs. 23.50 from Rs. 35.56 and light diesel oil up by Rs17.84 from the current Rs. 38.14. The catch was to raise non-tax revenue through maximum imposition of petroleum levy (PL) of Rs. 30 per litre as it remains with the federal government, whereas any rise in general sales tax (GST) has to be shared with the provinces as per prevalent National Finance Commission (NFC) Award giving them 57.5% of proceeds.
As expected, the rise was widely criticized by business houses, public at large and Opposition for imposing maximum PL on some petroleum oil lubricant [POL] products. The criticism needs to be understood in proper perspective. Everybody was aware of the fact that POL prices would increase in July 2020 because the price of international crude oil increased from $20 a barrel two months ago to more than $40 per barrel in June 2020.
However, the question is: can government levy maximum Rs. 30 per litre of PL after standard imposition of 17% GST? For many months, the PTI government had been increasing PL to recoup huge revenue shortfall faced by FBR. Nobody has yet raised the constitutional position of imposing PL. Where from does the government derive power to enhance it without seeking approval from the Parliament? The answer is amendment made in Petroleum Products (Petroleum Levy) Ordinance, 1961 through Finance Act, 2018 under the government of PML(N). It was in gross violation of Constitution of Islamic Republic of Pakistan [“the Constitution”]. The Finance Act, 2018 substituted Fifth Schedule to the Petroleum Products (Petroleum Levy) Ordinance, 1961 authorising maximum imposition at the rate of Rs. 30 per liter on High Speed Diesel Oil, Motor Gasoline, Superior Kerosene Oil, Light Diesel Oil, High Octane Blending Component and E-10 Gasoline. As regards Liquefied Petroleum Gas (produced/extracted in Pakistan), the maximum levy can be Rs. 20,000 per metric ton. After this amendment, the Government does not need not to go to Parliament and can raise the PL anytime while remaining within the maximum limit.
Since PL is non-tax item, any amendment in Petroleum Products (Petroleum Levy) Ordinance, 1961 could not have been made through Money Bill. The law passed in 2018 by then National Assembly was thus unconstitutional. In 2011, amendments were made in Petroleum Products (Petroleum Levy) Ordinance, 1961 through Petroleum Products (Petroleum Levy) Amendment Act, 2011, which was passed by both National Assembly and Senate as per the Constitution. It can be seen at the website of Senate of Pakistan using the following link: http://www.senate.gov.pk/uploads/documents/1363074572_505.pdf.
The substitution of Fifth Schedule to the Petroleum Products (Petroleum Levy) Ordinance, 1961 through Finance Act 2018, passed by National Assembly on May 18, 2018, bypassing the Senate was a flagrant violation of the Constitution. Now, it is being used by the PTI Government that is a continuation of violation of supreme law of the land by PML(N) Government. It was explained by the Supreme Court of Pakistan in Workers Welfare Funds m/o Human Resources Development, Islamabad through Secretary and others v East Pakistan Chrome Tannery (Pvt.) Ltd through its GM (Finance), Lahore etc. and others [(2016) 114 TAX 385 (S.C. Pak.)] as under:
“We may develop this point further; although Article 73(3)(a) of the Constitution states that a Bill shall not be a Money Bill if it provides for the imposition or alteration of a fee or charge for any service rendered, this does not mean that if a particular levy/contribution does not fall within Article 73(2) it must necessarily fall within Article 73(3). Sub-articles (2) and (3) are not mutually exclusive. There may very well be certain levies/contributions that do not fall within the purview of Article 73(3) but still do not qualify the test of Article 73(2) and therefore cannot be introduced by way of a Money Bill, and instead have to follow the regular legislative procedure.
The above judgement of the Supreme Court approved the brilliant discourse and conclusion on Money Bill by the illustrious Justice Mansoor Ali Shah (as Chief Justice Lahore High Court, later elevated to Supreme Court) in 2011 PTD 2643as under:
“The special legislative procedure is, therefore, an exception and must operate in its restricted scope. Being a special procedure it also has to be construed strictly as it is a deviation from the normal legislative process under the Constitution. Integrity of a money bill must be jealously guarded and matters falling outside the purview of Articles 73(2)(a) to (g) of the Constitution should not be permitted to stealthily crawl into a money bill (at times due to political sophistry of the Government in power) and adulterate its sanctity”.
At the time of passage of Finance Act, 2018, the above judgement of Supreme Court was in the field but nobody in the National Assembly, including members of PTI raised the issue as to how amendment in Petroleum Products (Petroleum Levy) Ordinance, 1961 could be made through Money Bill.
It is cardinal principle of law that if foundation of any law is unlawful then superstructure automatically collapses. Since the very amendment in Petroleum Products (Petroleum Levy) Ordinance, 1961 as part of Money Bill was unconstitutional, all actions taken thereunder are untenable in law. If PDM is sincere, it must go to Supreme Court against action of the PTI Government, but we all know that their protest is nothing but mere eyewash only to safeguard their corrupt leaders. The Supreme Court has also not taken suo muto action on this issue for violation of Constitution, though recently, it is articulated by the Honurable Justice Mansoor Ali Shah of Supreme Court of Pakistan in C.P.446-L/2019 re Mian Irfan Bashir v The Deputy Commissioner (D.C.), Lahore, etc as under:
At this junction it might be opportune to shed some light on the distinction between judicial review, judicial activism and judicial overreach. Judicial review is the power of the courts to examine the actions of the legislative, executive, and administrative arms of the government and to determine whether such actions are consistent with the Constitution. Actions judged inconsistent are declared unconstitutional and, therefore, null and void. Judicial review is the genus and judicial activism or judicial restraint are its subspecies. While exercising judicial review, there comes a point when the decision rests on judicial subjectivity; which is not the personal view of a judge but his judicial approach. One judge may accord greater significance to the need for change, while the other may accord greater significance to the need for certainty and status quo. Both types of judges act within the zone of law; neither invalidates the decision of another branch of the Government unless it deviates from law and is unconstitutional. Activist judges (or judicial activism) are less influenced by considerations of security, preserving the status quo, and the institutional constraints. On the other hand, self-restrained judges (or judicial restraint) give significant weight to security, preserving the status quo and the institutional constraints. Both judicial activism and judicial self-restraint operate within the bounds of judicial legitimacy.
Primarily, it is the constitutional obligation of the legislators to strictly comply with the legislative procedure provided in the supreme law of the land. The some instances of blatant violations are already discussed above. Another example is that of the Presidential Ordinance VI of 2021 [Tax Laws (Amendment) Ordinance, 2021] promulgated on February 11, 2021, yet not presented before the National Assembly and sent for comments to the Standing Committee of the Senate. Another one is was issued on December 2, 2020 as Ordinance No. XIII of 2020, called Special Technology Zones Authority Ordinance, 2020 The Prime Minister inaugurated the Special Technology Zones Authority (STZA) and appointed Amer Ahmed Hashmi as its Chairperson, according to a notification issued by the Cabinet Division on December 9, 2020. However, strangely, it is yet not available on the website of National Assembly or Senate in utter violation of Article 89 of the Constitution, which reads as under:
“Power of President to promulgate Ordinances
89. (1) The President may, except when the Senate or National Assembly is in session, if satisfied that circumstances exist which render it necessary to take immediate action, make and promulgate an Ordinance as the circumstances may require.
(2) An Ordinance promulgated under this Article shall have the same force and effect as an Act of Majlis-e-Shoora (Parliament) and shall be subject to like restrictions as the power of Majlis-e-Shoora (Parliament) to make law, but every such Ordinance—
(a) shall be laid—
(i) before the National Assembly if it contains provisions dealing with all or any of the matters specified in clause (2) of Article 73, and shall stand repealed at the expiration of one hundred and twenty days from its promulgation or, if before the expiration of that period a resolution disapproving it is passed by the Assembly, upon the passing of that resolution:
Provided that the National Assembly may by a resolution extend the Ordinance for a further period of one hundred and twenty days and it shall stand repealed at the expiration of the extended period, or if before the expiration of that period a resolution disapproving it is passed by the Assembly, upon the passing of that resolution:
Provided further that extension for further period may be made only once.
(ii) before both Houses if it does not contain provisions dealing with any of the matters referred to in sub-paragraph (i), and shall stand repealed at the expiration of one hundred and twenty days from its promulgation or, if before the expiration of that period a resolution disapproving it is passed by either House, upon the passing of that resolution
Provided that either House may by a resolution extend it for a further period of one hundred and twenty days and it shall stand repealed at the expiration of the extended period, or if before the expiration of that period a resolution disapproving it is passed by a House, upon the passing of that resolution: Provided further that extension for a further period may be made only once; and
(b) may be withdrawn at any time by the President.
(3) without prejudice to the provisions of clause (2),—
- an Ordinance laid before the National Assembly under subparagraph (i) of paragraph (a) of clause (2) shall be deemed to be a Bill introduced in the National Assembly; and
- an Ordinance laid before both Houses under sub-paragraph (ii) of paragraph (a) of clause (2) shall be deemed to be a Bill introduced in the House where it was first laid”.
Procedure in respect of Money Bill is provided in Article 73 of the Constitution is as under:
“Procedure with respect to Money Bills
73. (1) Notwithstanding anything contained in Article 70, a Money Bill shall originate in the National Assembly:
Provided that simultaneously when a Money Bill, including the Finance Bill containing the Annual Budget Statement, is presented in the National Assembly, a copy thereof shall be transmitted to the Senate which may, within fourteen days, make recommendations thereon to the National Assembly.
(1A) The National Assembly shall, consider the recommendations of the Senate and after the Bill has been passed by the Assembly with or without incorporating the recommendations of the Senate, it shall he presented to the President for assent.
(2) For the purposes of this Chapter, a Bill or amendment shall be deemed to be a Money Bill if it contains provisions dealing with all or any of the following matters, namely: —
- the imposition, abolition, remission, alteration or regulation of any tax;
- the borrowing of money, or the giving of any guarantee, by the Federal Government, or the amendment of the law relating to the financial obligations of that Government;
- the custody of the Federal Consolidated Fund, the payment of moneys into, or the issue of moneys from, that Fund;
- the imposition of a charge upon the Federal Consolidated Fund, or the abolition or alteration of any such charge;
- the receipt of moneys on account of the Public Account of the Federation, the custody or issue of such moneys;
- the audit of the accounts of the Federal Government or a Provincial Government; and
- any matter incidental to any of the matters specified in the preceding paragraphs.
(3) A Bill shall not be deemed to be a Money Bill by reason only that it provides—
- for the imposition or alteration of any fine or other pecuniary penalty, or for the demand or payment of a licence fee or a fee or charge for any service rendered; or
- for the imposition, abolition, remission, alteration or regulation of any tax by any local authority or body for local purposes.
(4) If any question arises whether a Bill is a Money Bill or not, the decision of the Speaker of the National Assembly thereon shall be final.
(5) Every Money Bill presented to the President for assent shall bear a certificate under the hand of the Speaker of the National Assembly that it is a Money Bill, and such certificate shall be conclusive for all purposes and shall not be called in question”.
Like its predecessors PPP and PML(N), the PTI Government frequently violates the command of the Constitution and judgements of the Supreme Court binding under Article 189 of the Constitution by:
- making Article 89 as substitute of normal procedure laid down through proper Bills after consultative process and taking input from the experts;
- including in Money Bills subjects that could not be part of Article 73;
- not presenting Money Bills before the National Assembly as required under Article 89(2)(a)(i) after holding many sessions after their promulgation;
- promulgating many Ordinances just 24 to 48 hours before or after the sessions of National Assembly and or Senate;
- keeping Presidential Ordinances covered under Article 73(2) pending (even not presented in the National Assembly and Senate for recommendations) and then including the same in the annual Finance Bill to get them passed as Finance Acts;
- usurping the legislative power of Parliament through Ordinances even when no exigency exists and both Senate and National Assembly are in existence holding regular sessions. Even joint sittings for emergent situations can be summoned as per procedure laid down in Article 72 of the Constitution;
- not submitting the Ordinances before the National Assembly or in Senate, or both, as the case may be, in terms of Article 89 of the Constitution; and
- seeking extension of 120 days without placing Ordinances if Money Bills before the National Assembly and in other cases in either of the Houses without offering for debate within 120 days, though Article 89(3) clearly says that these shall be deemed to have been laid according to the principle of Money Bill in National Assembly and in other case in either of the houses where they are first laid.
The list and date of presenting of Ordinances since 2008 in chronological order from latest to earlier for all Parliamentary Years of National Assembly are as under:
PTI period [2018 till today]
3rd Parliamentary Year (13th August, 2020 to 12th August, 2021)—the last session 30th was prorogued on March 6, 2021 as it was only for vote of confidence. The 29th was from February 19, 2021 to March 4, 2021.
National Assembly of Pakistan
|48.||Monday, 1st March, 2021||The Income Tax (Amendment) Ordinance, 2021|
|47.||Monday, 1st March, 2021||The PAF Air War College Institute Ordinance, 2021|
|46.||Wednesday, 24th February, 2021||The Elections (Amendment) Ordinance, 2021|
|45.||Thursday, 4th February, 2021||The Pakistan Telecommunication (Re-Organization) (Amendment) Ordinance, 2020|
|44.||Wednesday, 3rd February, 2021||The Employees Old-Age Benefits Act, 1976 (Ordinance No.XV of 2020)|
|43.||Wednesday, 3rd February, 2021||The Criminal Law (Amendment) Ordinance, 2020 (Ordinance No.XVII of 2020)|
|42.||Wednesday, 3rd February, 2021||The National Institute of Health (Re-Organization) Ordinance, 2020 (Ordinance No. XVIII of 2020)|
|41.||Monday, 1st February, 2021||The Anti-Rape (Investigation and Trial) Ordinance, 2020|
|40.||Monday, 1st February, 2021||The Federal Medical Teaching Institutes Ordinance, 2020|
2nd Parliamentary Year (13th August, 2019 to 12th August, 2020 )
1st Parliamentary Year (13th August, 2018 to 12th August, 2019):
|8.||Monday, 29th July, 2019||Naya Pakistan Housing and Development Authority Ordinance, 2019|
|7.||Tuesday, 18th June, 2019||The Assets Declaration Ordinance, 2019|
|6.||Monday, 22nd April, 2019||The Pakistan Medical and Dental Council Ordinance, 2019|
|5.||Friday, 25th January, 2019||The Elections (Amendment) Ordinance, 2019|
|4.||Thursday, 8th November, 2018||The Federal Public Service Commission (Validation of Rules) Ordinance, 2018|
|3.||Monday, 24th September, 2018||The Elections (Amendment) Ordinance, 2018|
|2.||Monday, 24th September, 2018||The Pakistan Electronic Media Regulatory Authority (Amendment) Ordinance, 2018|
Note: Many Ordinances were issued under the PTI Government, which were promulgated but not laid down and many after laying down, without debate and withdrawn by the President were made part of Finance Bills and passed as Finance Acts. Many instances were mentioned above where even those issued in December 2020 and January 2021 have been published in the official gazette but not presented before the National Assembly—these are deemed to be laid as per Article 89(3) of the Constitution.
It is for the office of Ministry of Law and Justice to show the total number of Ordinances issued under PTI and two earlier governments—PML (N) [2013-18] and PPP [2008-13].
Senate of Pakistan
For the current and earlier periods the link of Ministry of Law and Justice is:
The incontrovertible fact is that the PTI Government when in opposition, used to criticise PML(N) and PPP for resorting to Presidential Ordinances, where its own record is worse than both of them as in the last 30 months, it has promulgated over 60 Presidential Ordinances. Fault also lies with the Opposition in blocking legislation in the Senate. None of the governments—at federal and provincial levels—have shown interest to legislate for the welfare of the masses, especially the weaker segments of society [Welfare laws and role of State, Surkhyian, December 11, 2020]. The situation is still not favourable for PTI in Senate as total votes including allies and independents are only 48.
Failure of civilian governments and elected members can be seen from the fact that they could not undo the legacy of two military dictators—General Zia-ul-Haq and General Pervez Musharraf. On September 13, 2001, the duo comprising General Pervez Musharraf [who seized power in a military coup on October 12, 1999 and resigned on August 18, 2008 from the presidentship to avoid impeachment, now awarded capital punishment for alleged high treason by the special court—detailed order has still not been released—eliciting criticism from armed forces and many others] and Shaukat Aziz [who served as Prime Minister of Pakistan from August 20, 2004 to November 15, 2007 as well as Finance Minister from November 6, 1999 to November 15, 2007]; decided to promulgate a new income tax law on the dictates of IMF. The new law repealed the time-tested Income Tax Ordinance, 1979 after 22 years when it attained acceptability and stability after authentic judicial pronouncements.
Before unnecessary enactment of the new law, many opposed it on two main grounds. Firstly, the Musharraf regime lacked legitimacy—it could not enact a tax law violating well-established principle, ‘no taxation without representation’. Secondly, it contained numerous typographical errors, conceptual inconsistencies and complexities. Ignoring the objections, General Musharraf promulgated Income Tax Ordinance, 2001, following in the footsteps of General Zia-ul-Haq, who promulgated Income Tax Ordinance, 1979. Income Tax Ordinance, 2001, even after thousands of amendments since 2002, is still full of drafting blunders—it is complicated, obscure and convoluted. Unfortunately, all civilian governments have never bothered to undo the legacy of a military dictator.
Musharraf-gifted Income Tax Ordinance, 2001 till today remains in the field. Two political parties completed a decade of democracy [2008-18], namely, Pakistan Peoples Party [PPP] and Pakistan Muslim League (Nawaz) [PML-N], claiming to be champions of democracy, never cared to replace it. The self-suiting and self-serving laws like allowing disqualified persons to head a political party were passed within hours in National Assembly and Senate but oppressive tax laws from dictatorial eras adversely affecting the lives of millions of under-privileged Pakistanis and dampening business growth, were retained—it exposes tall claims of undoing legacy of military dictators by all parties including PTI.
The compelling reason for hurriedly promulgating Income Tax Ordinance, 2001, without even removing typographical errors, was a precondition imposed by the IMF that the last tranche of Stand-By Arrangement of $131 would not be released unless a new income tax law, drafted by an Australian Assistant Professor (Lee Burns), was enforced. It was an act of naked and crude blackmailing. On September 6, 2001, the then Central Board of Revenue [now Federal Board of Revenue—FBR), formally placed a request to the Cabinet Division to include the draft Income Tax Ordinance, 2001 in the agenda of the next Cabinet meeting. The Ordinance was going to be enforced in July 2002, but it was promulgated on September 13, 2001, two days after the New York tragedy [9/11]. Had the Government waited for some more days, it could have avoided its promulgation in the aftermath of General Pervez Musharraf’s joining the Bush Camp to support military attack/occupation in Afghanistan to usurp resources in the name of ‘war on terror’ (sic), the IMF released the last tranche without any hassle. Now, the IMF is again forcing us to mutilate the tax codes, make them complicated and PTI Government, like its predecessors, is ready to comply at the cost of growth in all areas, especially agri-tech, IT and IT-enabled exports that can bring us much more foreign exchange than what we are begging for from IMF. Imran Khan is proving no different from earlier rulers as far as debt enslavement is concerned—see details in Challenges on the fiscal front, TNS, [Political Economy] The News, December 20, 2020.
All the civilian governments since 2008 have failed to establish constitutional democracy by not implementing Article 140A of the Constitution requiring devolution of political, administrative and fiscal powers to grass root level. Local self-governance should be the top priority. Article 140A of the Constitution declares political, administrative and fiscal decentralisation as the key to democratisation of governance. A council, elected by the local residents, should be given wide-ranging powers and functions covering education, health care and social welfare services. They should also be responsible for matters related to the residents’ free-time, recreation, housing, and the management and maintenance of their living environment (i.e. roads, streets, water supply and sewerage), as well as land-use planning and functional municipal structures.
Unfortunately, all political parties ruling in the provinces are least concerned in uplifting the rural areas to a respectable status to check rising migration to urban areas, which are fast becoming nightmares with every passing day.
We have the resources but the system for self-governance, successfully working in many countries of the world, is non-existent despite clear command of Article 140A of the Constitution. Resultantly, power is not with the people but in the hands of a few “elites”. The PTI Government must fulfill this election promise without any further delay.
We need to implement Article 140A in letter and spirit. Ineffective local governments, without devolving political, administrative and financial power, will be the negation of constitutional command. Decentralization of financial powers requires levy and collection of taxes by local governments for meeting the needs of local residents as stated above. Local governments working on the principle of self-governance alone can ensure that revenues are spent exclusively for the benefit of public and not the privileged segments of society alone. The candidates desirous of contesting these elections must first undergo an intensive course to understand laws and procedures and their duties towards the voters selecting them as their representatives at grass root level. These leaders then can go up to provincial and federal levels to represent larger constituencies being aware of the issues faced by the masses.
Economic growth, revenue mobilisation and prosperity for all citizens can never be achieved unless taxation and spending system is restructured for social welfare as elaborated in ‘Towards Flat, Low-rate, Broad and Predictable Taxes’ (PRIME Institute, Islamabad, 2016, revised and enlarged version published in December 2020 is available free of cost at: https://primeinstitute.org/towards-flat-low-rate-broad-and-predictable-taxes/ and in Tax Reforms in Pakistan: Historic & Critical View, published by Pakistan Institute of Development (PIDE), available free at: https://www.pide.org.pk/pdf/Books/Tax-Reforms-in-Pakistan-Historic-and-Critical-View.pdf.
We can make Pakistan a welfare and prosperous country through fiscal decentralisation—taxation at local government level and spending revenue for the welfare of common citizens. There is nothing to be pessimistic. Solutions are available. The only thing we require is to present a welfare model for open public debate involving all stakeholders, and convince all political parties to make these as their common national agenda, make legislation for it and ensure enforcement above party line.
Ms. Huzaima Bukhari, Advocate High Court and Visiting Faculty at Lahore University of Management Sciences (LUMS), is author of numerous books and articles on Pakistani tax laws. She is editor of Taxation and partner of Huzaima & Ikram, a leading law firm of Pakistan. From 1984 to 2003, she was associated with Civil Services of Pakistan. Since 1989, she has been teaching tax laws at various institutions including government-run training institutes in Lahore. She specialises in the areas of international tax laws, corporate and commercial laws. She is review editor for many publications of Amsterdam-based International Bureau of Fiscal Documentation (IBFD) and contributes regularly to their journals. She has to her credit over 1500 articles on issues of public importance, printed in various journals, magazines and newspapers at home and abroad.
She has coauthored with Dr. Ikramul Haq many books that include Tax Reforms in Pakistan: Historic & Critical Review, Towards Flat, Low-rate, Broad and Predictable Taxes (revised/enlarged edition of December 2020), Pakistan: Enigma of Taxation, Towards Flat, Low-rate, Broad and Predictable Taxes, Law & Practice of Income Tax, Law , Practice of Sales Tax, Law and Practice of Corporate Law, Law & Practice of Federal Excise, Law & Practice of Sales Tax on Services, Federal Tax Laws of Pakistan, Provincial Tax Laws, Practical Handbook of Income Tax, Tax Laws of Pakistan, Principles of Income Tax with Glossary andMaster Tax Guide, Income Tax Digest 1886-2011 (with judicial analysis).
The recent publication, coauthored with Abdul Rauf Shakoori and Dr. Ikramul Haq, is Pakistan Tackling FATF: Challenges & Solutions
available at: https://www.amazon.com/dp/B08RXH8W46
She regularly writes columns for Pakistani newspapers and has contributed over 1500 articles on issues of public finance, taxation, economy and on various social issues in various journals, magazines and newspapers at home and abroad.
Dr. Ikramul Haq, Advocate Supreme Court, specialises in constitutional, corporate and tax laws. He established Huzaima & Ikram in 1996 and is presently its chief partner as well as partner in Huzaima Ikram & Ijaz. He studied journalism, English literature and law. He is Chief Editor of Taxation andVisiting Faculty at Lahore University of Management Sciences (LUMS).
He has coauthored with Huzaima Bukhari many books that include Tax Reforms in Pakistan: Historic & Critical Review, Towards Flat, Low-rate, Broad and Predictable Taxes (revised & Expanded Edition, Pakistan: Enigma of Taxation, Towards Flat, Low-rate, Broad and Predictable Taxes (revised/enlarged edition of December 2020), Law & Practice of Income Tax, Law , Practice of Sales Tax, Law and Practice of Corporate Law, Law & Practice of Federal Excise, Law & Practice of Sales Tax on Services, Federal Tax Laws of Pakistan, Provincial Tax Laws, Practical Handbook of Income Tax, Tax Laws of Pakistan, Principles of Income Tax with Glossary andMaster Tax Guide, Income Tax Digest 1886-2011 (with judicial analysis).
The recent publication, coauthored with Abdul Rauf Shakoori and Huzaima Bukhari is Pakistan Tackling FATF: Challenges & Solutions
available at: https://www.amazon.com/dp/B08RXH8W46
He is author of Commentary on Avoidance of Double Taxation Agreements signed by Pakistan, Pakistan: From Hash to Heroin, its sequelPakistan: Drug-trap to Debt-trap and Practical Handbook of Income Tax. He regularly writes columns for many Pakistani newspapers and international journals and has contributed over 2500 articles on a variety of issues of public interest, printed in various journals, magazines and newspapers at home and abroad.
Our joint and individual books and articles can be seen at: