'Storm of inflation': PM Shehbaz announces 10pc 'super tax' on large-scale industries

Premier assures economic conditions will improve and confidence in the economy will recover

Prime Minister Shehbaz Sharif on Friday announced that to control the “storm of inflation”, the government would be imposing a 10 per cent “super tax” on large-scale industries.

In his address, the premier discussed the “tough” economic decisions taken by the incumbent coalition government as the country is near default.

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The prime minister stated that the revenue generated from the “super tax” would be beneficial for “poverty alleviation” in order to support the burden of inflation on the masses.

Sectors which will be subject to the tax include; steel, sugar, cement, oil, gas, fertilisers, LNG terminals, banking, textile, automobile, cigarettes, chemicals and beverages.

Shehbaz further said that cross-subsidy would be used to strengthen public services in the education and the health sector and elaborated that such policies were necessary to reduce the country’s reliance on foreign loans.

“That is what we call economic freedom; that is what we call coming out of the shackles of slavery of borrowing money,” he furthered.

The premier also announced the imposition of another tax on those citizens who earn an annual income of Rs150 million or higher.

According to the prime minister, those earning Rs150 million will have their tax rate increased by 1%. Those earning Rs200 million will have their tax rate increased by 2%. Those individuals earning more than Rs250 million will have their tax rate increased by 3% and those earning more than Rs300 million will have their tax rate increased by 4%.

While announcing the increased tax rates, PM Shehbaz stated that the “rich would have to do their part” to alleviate the burden of inflation on the poorer segments of society.

“Those who are blessed today must come forward and make Pakistan prosperous and progressive,” he added. Shehbaz further stated that the upcoming budget would be the “first in history” that aimed at lessening the burden on the poor.

PM Shehbaz criticized the rich for evading tax, stating that it was the responsibility of all bodies of the state to ensure tax collection is thorough.

According to the premier, revenue collection teams have been formed, as assistance will be sought from all provincial and federal institutions. He also said that modern technology and digital tools would be employed to aid revenue collection.

The premier stated that the economic conditions placed upon the country aimed to reduce the burden of inflation on the masses and that the “incompetence and corruption” of the former ruling Pakistan Tehreek-e-Insaaf (PT) government had destroyed the economy.

In his address, the premier assured that economic conditions would improve and confidence in the economy would recover.

With regard to the $6 billion bailout package from the IMF, PM Shehbaz stated that negotiations with the financial watchdog had been successful and if the body had no more requirements, the tranche would be resumed.

“We have taken decisions that will prove difficult in the short run but in the long run they will pay off,” he added.

The premier highlighted that the coalition government had two options initially; to call early elections or to tackle the economy. He remarked that elections would have been the easier option, however, “history would not forgive us”.

“It was not to save the government by rather the country,” he added.