ISLAMABAD: PTI leaders have excoriated the coalition government for imposing a “super tax” on large-scale industries, saying that the measure would “rattle the economy”, increase unemployment and inflation, shoot up imports and push Pakistan further into economic crisis.
“This is a huge blow to the growing industries,” general-secretary Asad Umar said at a press conference in Islamabad on Friday.
In an address to the nation today, Prime Minister Shehbaz Sharif announced a 10 per cent levy on sectors including sugar, oil and gas, cement, steel, airlines, fertilisers, LNG terminals, textile, banking, automobile, cigarettes, beverages, and chemicals.
High-net-worth individuals will also be subject to a “poverty alleviation tax”. Those whose annual income exceeds Rs150 million will be subject to 1pc tax; for Rs200 million, 2pc; Rs250 million, 3pc; and Rs300 million will be taxed 4pc of their income. The new measures triggered a plunge at the Pakistan Stock Exchange (PSX) which crashed after the benchmark KSE-100 Index lost more than 2,000 points, or 4.8pc, in the morning session.
In his presser today, Umar said: “This [super tax] is an attack on those sectors of the economy that have the potential of growth […] that can increase production and livelihood […]and this is the reason why the market lost 2,000 points during Shehbaz Sharif’s speech.
“You can clearly figure out from this how dangerous and fatal the budget is for the economy,” the former federal minister pointed out.
PTI, which was the largest party in the National Assembly before its members resigned en masse from the Lower House in April, disagreed with the premier’s assessment, claiming that the measures would instead further burden the public in the form of higher prices.
Former federal minister and PTI leader Hammad Azhar said that the super tax meant “taxing the already taxed even more” and would “squeeze the formal sector of the economy”.
“The economy is nosediving and such a measure at this time will reverse the industrialisation momentum that PTI generated,” he pointed out.
Azhar highlighted that the industry was already facing crippling costs due to rising prices of commodities and energy. “This super tax will be priced in their balance sheets and passed on to the customers in many cases. Means even higher prices for the public.”
Former information minister Fawad Chaudhry said that the PSX nosedive showed the amount of confidence the nation had on the Shehbaz-led government.
“The government’s economic policies are making Pakistan bankrupt. Getting rid of this govt is in the best interest of Pakistan,” he said.
Meanwhile, ex-finance minister Shaukat Tarin simply said that the market didn’t believe in the PML-N government anymore.