Huzaima Bukhari & Dr. Ikramul Haq
The adoption of Finance Bill 2019 on June 28, 2019 by National Assembly by majority vote of 176 to 146, included many legal amendments that could not have been made part of Money Bill as per law laid down by the Supreme Court of Pakistan. The Finance Act, 2019 containing large number of amendments in various tax codes for achieving tax target of Rs. 5550 billion fixed for fiscal year 2019-20 has already been commented upon by many and this newspaper has widely covered the same, in fact, more than any other publications. There is a consensus that the Opposition parties though criticised the incumbent government for presenting what it called “the IMF-imposed budget” failed to offer in concrete terms (shadow budget or concrete tax proposals etc) aimed at freeing the country of the monstrous fiscal and current account deficits, debt-enslavement and ensuring rapid economic growth with equity and improving the overall living conditions of the citizens.
The grant of unprecedented amnesty for foreign and domestic assets, expenditures etc might have pleased the rich and mighty but nothing worthwhile is made part of Finance Act, 2019 that can make Pakistan a favorite place for investment or render its economy self-reliant or to improve the plight of the common man—no measures for universal pensions, social security or income support announced. There are no tax breaks for companies for creating jobs for the unemployed youth and earmark funds for human development, especially for vocational training for those who could not attend schools or colleges.
The passage of Asset Declaration Act, 2019 and Public Finance Management Act, 2019 as Money Bill was in gross violation of the Constitution of Islamic Republic of Pakistan (“the Constitution”) as held by the Supreme Court 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.)], Mir Muhammad Idris v FOP PLD 2011 SC 213 and Sindh High Court Bar v FOP PLD 2009 SC 789. These should have gone to both the Houses [Senate and National Assembly]. These enactments cover many laws that were passed by both the Houses. Interestingly, when original Finance Bill, 2019 was sent for comments of Senate as required under Article 73 of the Constitution the above enactments were not included therein as part of Money Bill. Strangely, nobody in the National Assembly or Senate took note of it. This shows how little respect our legislators have for the supreme law of the land. The Asset Declaration Ordinance of May 16, 2019 was, in fact, pending before the Senate as a Bill, as laid down in Article 89(a)(ii) of the Constitution. The Upper House has yet not raised any objection for its inclusion in Money Bill.
According to media release of Free and Fair Election Network (FAFEN), National Assembly passed the budget on June 28, 2019. On the day of passage of budget, the following was the position:
- The House met for five hours and 21 minutes.
- The proceedings started at 1121 hours against the scheduled time of 1100 hours.
- The Speaker presided over the sitting for two hours and 38 minutes while the rest of the proceedings were chaired by a member of Panel of Chairpersons.
- The Leader of the House (Prime Minister) attended the sitting for 25 minutes.
- The Leader of the Opposition was present for 28 minutes.
- A total of 12 lawmakers (4%) were present at the outset and 161 (47%) at the adjournment of the sitting.
- The parliamentary leader of PPPP, PML-N, GDA, BAP, PML and BNP attended the sitting.
- Four out of 10 minority lawmakers were also present during the proceedings.
- The House approved 107 Supplementary Demands for Grants for the fiscal year 2018-19 while Excess Demands for Grants and Appropriation for the financial years, 1993-1994, 2002-2003, 2008-2009, 2014-2015, 2015-2016, 2016-2017 and 2017-2018 were also approved.
- Tabled by Minister for Human Rights, the House adopted a resolution to condemn the remarks of a party leader against the Speaker National Assembly.
- The Minister of State for Revenue tabled the Schedule of Authorized Expenditure 2019-20, the Supplementary Schedule of Authorized Expenditure 2018-2019 and the Excess Schedule of Authorized Expenditure 1993-1994, 2002-2003, 2008-2009, 2014- 2015, 2015-2016, 2016-2017 and 2017-2018.
Representation and Responsiveness
- Eight lawmakers participated in the general discussion on Supplementary Demands for Grants and Appropriations for the financial year 2018-2019. They spoke on it for 64 minutes.
- Prime Minister spoke on the economic plan, defense, law and order as well as challenges in FATA and Balochistan for 23 minutes.
Order and Institutionalization
- PML-N and PPPP lawmakers pointed out the quorum at 1513 and 1536 hours respectively but it was found complete upon counting.
- The opposition lawmakers walked out of the House at 1556 hours against the Chair’s attitude who allegedly snubbed two PPPP lawmakers demanding the floor for one of their colleagues. They did not return to the House till adjournment of the sitting.
- Three lawmakers spoke on points of order for five minutes.
- State Minister for Revenue spoke on a point of personal explanation for two minutes.”
The new tax measures became effective from July 1, 2019, but according to a news report, the controversial Public Finance Management Act came into force immediately [on June 28, 2019] “in order to meet the condition of the IMF”. Making this law, like Asset Declaration Act, 2019, as part of Money Bill was a clear violation of the judgement of Supreme Court [(2016) 114 TAX 385 (S.C. Pak.)] which says:
“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 discussion above that the subject contributions/payments do not constitute a tax is sufficient to hold that any amendments to the provisions of the Ordinance of 1971, the Act of 1976, the Act of 1923, the Ordinance of 1968, the Act of 1968 and the Ordinance of 1969 could not have been lawfully made through a Money Bill, i.e. the Finance Acts of 2006 and 2008, as the amendments did not fall within the purview of the provisions of Article 73(2) of the Constitution”.
“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”.
It is time that our legislators should read the above case law and decide what serious violations have been committed by passing certain laws that could not have been included in the Finance Act, 2019 clearly done to avoid their passage by both the Houses as required under the Constitution. It is a serious matter that requires attention of all concerned.
The writers, lawyers and partners in HUZAIMA, IKRAM & IJAZ, are Adjunct Faculty at Lahore University of Management Sciences (LUMS).