Saturday, 25 June, 2022 I 25 Dhul-Qadah, 1443 I Rs 15.00 I Vol XII No 356 I 12 Pages I Karachi Edition
PM unveils ‘suPer tax’ on lsMs to rein in unbridled inflation g
Assures economic conditions to improve soon
ISLAMABAD
P
saleem Jadoon
rime minister shehbaz sharif on Friday announced the levy of a 10 percent “super tax” on large-scale manufacturing (Lsm) industry with the aim to cushion the blow of “unbridled inflation.” “this super tax will help shore up revenue generation, leading to poverty alleviation besides supporting the burden of inflation on the masses.” prime minister shehbaz sharif made the announcement through a video message after chairing a meeting of his economic team in islamabad here on Friday. the prime minister informed that teams will be formed to collect this tax after the passage of budget bill. it is to be noted that the “super tax” has been imposed on industries include: cement, steel, sugar, oil and gas, fertilizer, banks, automobiles and cigarette. in his address, the premier elaborated that the incumbent coalition government had to take the “tough economic” decisions to avoid default and revive economy.
pm shehbaz further said that the additional revenue to be generated through this tax would be utilized for strengthen public services in the education and the health sector, adding that such policies were the need of the hour to reduce 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. similarly, the premier 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%. “the rich would have to do their part to alleviate the burden of inflation on the poorer segments of society. the affluent class must come forward and play their part for making pakistan a prosperous and progressive state,” the
premier underscored while announcing the tax. shehbaz sharif further stated that the budget for 2022-23 would be the “first in history” which lessen the burden on the poor. pm shehbaz criticized the rich for evading tax, stating that it was the responsibility of all segments of the society to pay what owe to the country for a bright future of the next generations. “this state belongs to everyone and they will have to play due to role for its sovereignty, prosperity and progress.” the premier informed that revenue collection teams have been formed and 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 prevailing economic conditions warrant drastic measures to reduce the burden of inflation on the masses. “the incompetence and corruption of the former ruling pakistan tehreek-e-insaaf (pt) government had destroyed the economy and today the entire nation is paying through the nose for their (pti leadership)’s misdeeds”, pm shehbaz regretted. 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.
$2.3b Chinese loan to stabilize forex reserves: Miftah ISLAMABAD staff report
minister for Finance and revenue miftah ismail on Friday said that state Bank of pakistan has received us$2.3 billion from china, saying this amount will help shore up the fast depleting forex reserves. “i am pleased to announce that chinese consortium loan of rmB 15 billion (roughly $2.3 billion) has been credited into sBp account today, increasing our foreign exchange reserves,” he said in a tweet. the development came two days after china signed a $2.3 billion commercial loan deal with pakistan, as the government waits for the rollover of three more maturing loans totalling $2 billion. the official foreign exchange reserves stood in single digits at $8.24 billion. However, these loans will give it a boost, opening blocked financing pipelines. pakistan had repaid the $2.3 billion commercial loan in march in the hope to get it back in April. However, china had placed a condition that the money could not be used due to weakening of the external sector position of pakistan. china also wanted pakistan to re-
main committed to the international monetary Fund (imF) loan programme. on tuesday, the finance minister had announced a deal with the imF on budget numbers, aligning the figures with the global lender’s assessments of revenues and expenditures for the next fiscal year. the government has also accepted some of the tough conditions for the sake of reaching a deal with the imF. the global lender’s resident representative esther perez said on Wednesday in a brief statement that “discussions between the imF staff and the authorities on policies to strengthen macroeconomic stability in the coming year continue, and important progress has been made over the fiscal year 2022-23 budget”. However, finance ministry officials said that the understanding reached with the imF on the budget would help complete the legislation process before the end of the ongoing fiscal year on next thursday. in march 2019, the china development Bank had extended a commercial loan for three years at a six-month china shanghai interbank offered rate (sHiBor) plus 2.5%.
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