Pak PM announces 10% poverty alleviation tax on 13 industrial sectors

24 Jun '22

2 min read

Pic: Shutterstock

Pakistan Prime Minister Shehbaz Sharif today announced a 10 per cent poverty alleviation tax (super tax) on large industries to reduce tax burden on the masses and improve economic security. The tax will be applicable to 13 sectors—textile, cement, steel, sugar, oil and gas, fertiliser, LNG, banking, automobile, beverages, chemicals, airlines and tobacco.

“The collection from this tax will be used to alleviate poverty in Pakistan and will be funded by the high income earners,” the prime minister said after a meeting with the government’s economic team.

“We intend to tax high income earners so that the entire nation can reap the benefit through education, health, infrastructure, skills education and IT uplift,” he was quoted as saying by Pakistani media reports. “This is a cross subsidy and if we do not act immediately, then loans are the only option.”

“Around 40 per cent of [the] tobacco manufacturing industry is informal and does not pay tax,” he said.

Taxes worth Rs 2 billion does not enter the national exchequer due to negligence of authorities. “We will make use of digital tools to end tax evasion,” he said.

High-income earners should play their role for growth of the nation, Sharif stressed.

The tax for a year will help raise over Rs 400 billion ahead of a deal to resume crucial funding from the International Monetary Fund (IMF), finance minister Miftah Ismail explained.

He said a one-time tax slab from 10 per cent to 40 per cent will also be introduced on individual annual earnings between Rs 150 million and Rs 400 million.

Fibre2Fashion News Desk (DS)

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