In a bid to shore up revenues for supporting the country’s poor amid rising inflation, Prime Minister Shehbaz Sharif on Friday announced that the government will be imposing a 10 per cent “super tax” on large-scale industries.
The large-scale industries include:
- Cement
- Steel
- Sugar
- Oil and Gas
- Fertilizers
- LNG terminals
- Textile
- Banking
- Automobile
- Cigarettes
- Beverages
- Chemicals
His speech coincided with a nosedive at the Pakistan Stock Exchange, as its benchmark KSE-100 index saw a sharp 2,053-point drop before trading was halted.
In an address today, the premier spoke about the “tough” budget decisions the coalition government made. He said that these decisions were “courageous” and necessary to protect the country from “serious dangers”.
Miftah Ismail clarify by saying that: The super tax of 4% will be applicable to all sectors. But for the specified 13 sectors, another 6% will be added for a total of 10%. So their tax rates will go from 29% to 39%. This is a one-time tax needed to curtail the previous four record budget deficits.
Recalling the government’s options when it first came to power, the premier said that it would have been easy to “leave the public in crisis” and become “silent spectators like others”. However, the government chose instead to take tough decisions and tackle the sinking economy.
Despite the challenges, the Prime Minister pointed out that the government chose the latter option. He said that history had shown that in difficult times, it was the poor people who always made sacrifices. “Today, it is time for the affluent citizens to do their part. It is their turn to show selflessness. And I am confident that they will contribute fully to play their part.”
He said that the institutions whose job it was to collect taxes should take from the rich and give to the poor. However, he lamented that the “big ones” often evaded paying taxes.
The prime minister said that it is the responsibility of the state, including the prime minister, to ensure that tax money goes to the national treasury. “We have not been successful in this so far,” he said.
PM Shehbaz said: “It is never too late. Right after the budget is passed, teams will be formed to collect taxes. Assistance will be sought from all constitutional institutions and we will employ modern technology and digital tools for this purpose.”
