The super-rich swing into action against the Robin Hood tax after the markets make a point by going into a tailspin.
By Staff Reporter
ISLAMABAD: The government scrambled to control damage Friday after the announcement of a 20 percent super tax sowed panic among the markets, causing the PSX to lose 2,055 points or 4.81 value in short order after hte announcement, prompting a closure to stem further damage.
Finance Minister Miftah Ismail took to Twitter to explain the super tax applicable to all sectors would be 4 percent, not 10 percent.
“But for the specified 13 sectors, another 6 percent will be added for a total of 10 percent. So their tax rates will go from 29 percent to 39 percent”, he said. “This is a one-time tax needed to curtail the previous four record budget deficits.”
The 13 sectors targeted with the higher tax rate are cement, sugar, steel, oil, gas, fertilisers, LNG terminals, banking, textile, automobile, cigarettes, chemicals and beverages.
Business associations hastened to raise their voices against the proposed tax. “No country in the world can charge 39 percent tax to corporations and still keep the economy afloat”, said Acting President FPCCI Shabbir Mansha in a statement, while he “categorically denounced imposition of 10 percent super tax on large industries”.
The FPCCI (Federation of Pakistan Chambers of Commerce & Industry) is the apex body of Pakistani trade and industry and the chief representative of the country’s private sector.
Mansha reiterated the FPCCI’s longstanding position that the government should not squeeze the existing taxpayers further but look to broaden the tax net, which he said was “the only practical and sustainable way to generate more taxes without hurting the industries, exports, employment and the economic growth”.
He expressed his shock that the federal budget 2022-23 was announced just two weeks back and it mentioned no super tax on industries. “It is a highly abrupt, unfortunate and anti-industry measure”.
There was no dearth of voices in support of the tax though. “I should congratulate [Finance Minister Miftah Ismail] on imposing super tax on large industries as they are already beneficiaries of many benefits from the [government]”, said a tweet from the Pakistani author and economist Yousuf Nazar.
“One time super tax on corporates is good but the [government] needs to do more to bring incomes of large agricultural landlords and land mafia into the tax net so they pay income tax”, he said in another tweet.
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