– Muhammad Umair Zeb (Finance and Tax Analyst)

  • Bringing certain enforcement measures on the premise of improving the national economy.
  • Levy will cover Banking, cement, steel, sugar, oil and gas, fertilizer, LNG, textile, and automobile sectors

Prime Minister Shehbaz Sharif on Friday announced to impose a 10 percent ‘Super Tax’ on over 12 large industries and also on affluent persons with more than Rs 150 million annual income with a rate up to four percent. That “tough decisions” have been taken to protect the economy on budget 2022-23.

Addressing the nation, after a meeting with his economic team, the premier said that the coalition government has taken some “tough decisions” regarding the federal budget for the next fiscal year 2022-23. “I want to brief the people about those decisions and the actual [economic] situation of the country,” he said, highlighting the two major reasons behind these decisions.

“Our first motive is to provide relief to the masses and to reduce the burden of inflation on the people and facilitate them,” he elaborated.

“Our second motive is to protect the country from going bankrupt,” he said, adding that it has been devastated due to the “incompetency and corruption” of the previous Imran Khan-led government.

The decisions taken now will save the country from bankruptcy, he vowed.

Meanwhile, PM Shehbaz further added that other motives included stabilization of the economy and prosperity of the county. “These aren’t just words, this is the voice of my heart, and InshaAllah we will be able to achieve all these targets,” he maintained.

13 sectors to pay 10% ‘super tax’

  • Cement
  • Banking Sector
  • Sugar
  • Oil
  • Gas
  • Fertilizer
  • LNG terminal
  • Textile
  • Automobile
  • Cigarette
  • Airlines
  • Beverages
  • Chemical

Such sectors, which have an annual income of Rs300million, would pay 10% super tax.

The premier said that 60% of the formal sector was paying taxes, however, the 40% informal sector was not part of the tax net. “It is the fault of the state of Pakistan.”

More taxes for one year

  • 1% tax on people having an annual salary of over Rs150 million
  • 2% tax on people having an annual salary of over Rs200 million
  • 3% tax on people having an annual salary of over Rs250 million
  • 4% tax on people having an annual salary of over Rs300 million

The Pakistan Stock Exchange (PSX) crashed on Friday minutes after Prime Minister Shehbaz Sharif announced a 10 percent tax on large-scale industries.

The bourse stayed flat until two hours after the opening bell. However, at 11:40 am, the market witnessed a steep dip with the KSE-100 losing 1,598 points and sinking to 41,100. At 12pm, the benchmark KSE-100 index was down 2,053 points or 4.8pc.

As per the PSX Rulebook, if the index goes five percent above or below its last close and stays there for five minutes, trading in all securities is halted for a specified period. “Massive Taxes” as the reason behind the plunge. “The market has reacted very negatively because it will severely hurt corporate profitability,”

  • Muhammad Umair Zeb is Peshawar-based freelance journalist, columnist (Khyber Mail, The Business Recorder, The News Int) & Finance and Tax Analyst.

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