KARACHI: While reacting to the super tax imposed by PM Shehbaz Sharif on large-scale industries, Pakistan Tehreek-e-Insaf (PTI) Secretary General Asad Umar on Friday said that the super tax was a huge blow to the growing industries.
Addressing a press conference in Islamabad, he said that the measure would “rattle the economy”, increase unemployment and inflation, shoot up imports, and push Pakistan further into the economic crisis.
In an address to the nation today, Prime Minister Shehbaz Sharif announced a 10 percent levy on sectors including sugar, oil and gas, cement, steel, airlines, fertilisers, LNG terminals, textile, banking, automobile, cigarettes, beverages, and chemicals.
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.
For the past 20 years, he continued, Pakistan had a policy of gradually decreasing taxes on industries. “But they have ruined it all now.”
He further stated that even now, despite increasing prices of every commodity — diesel, petrol, gas, and food items — the PM said the deal with the International Monetary Fund (IMF) will only be signed if the fund doesn’t make more demands.“This is a joke with the public,” he said.
He also claimed that the government didn’t care about the public because it knew the public never chose it. “All they care about are the people who brought them. How will America be happy? Will it be happy by recognising Israel? By extending ties with India or by giving bases [to the US]?”
Meanwhile, countering the prime minister’s remarks on PTI leading the country towards a default, Umar said that when the Imran-led government was “ousted”, the foreign exchange reserves in the State Bank of Pakistan (SBP) were $16.4 billion.
Umar further said that the PML-N government had presented the “real budget today”.
He stated that according to the Constitution when the budget was presented, the Senate had a time of 14 days to debate it and present its observations and reservations. “But they named the budget presented on July 11 provisional.
“Then they let 14 days pass and made an announcement today in which taxes of billions of rupees were imposed. This is a violation of the Senate’s constitutional rights,” Umar said.
He, subsequently, demanded that since the budget was finalised today, the Senate should be given 14 days from today onwards to discuss it. “If this doesn’t happen then the budget will become unconstitutional and can be challenged in the courts.”
Meanwhile, former federal minister and PTI leader Hammad Azhar said that the super tax meant “taxing the already taxed even more”, adding that it 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.”
Meanwhile, ex-finance minister Shaukat Tarin simply said that the market didn’t believe in the PML-N government anymore
“Total Rs60bn realistically expected from the super tax. Out of this, Rs46bn will come from banks. The total tax collection target is Rs7,400bn which will be met by inflation alone. So for a gimmick (like the imports ban), they heavily taxed the already taxed formal sector,” he said.
Former information minister Fawad Chaudhry said that the PSX meltdown showed the amount of confidence the nation had in the Shehbaz-led government.
“The government’s economic policies are making Pakistan bankrupt. Getting rid of this government is in Pakistan’s best interest,” he said.
Meanwhile, ex-finance minister Shaukat Tarin simply said that the market didn’t believe in the PML-N government anymore.
