After big industries, govt discloses businesses to be targeted for tax
A day after the government imposed a ‘super tax’ on big industries and high earners, the federal finance minister suggested that they will be bringing in a host of small businesses and professionals under the tax net to replenish the empty coffers of the country.
In a series of messages posted on the microblogging network Twitter on Saturday morning, Federal Finance Minister Miftah Ismail responded to concerns of a senior businessman Musadaq Zulqarnain that salaried individuals were being taxed while small business owners such as retailers and traders were being let off the hook along with “professionals”.
“We are bringing in (gently) millions of shops into the tax net,” Miftah said, reminding the business executive that jewelers have been brought into the tax net.
“Rest assured, I will in bring all the professionals you mentioned (designers, lawyers, doctors etc) into the tax net over the next few months.”
The federal finance minister went on to add that small shopkeepers and jewelers were taxed after discussions and agreements with their respective associations.
He also hinted at who else is on the government’s radar to tax.
“Now I will bring in real estate brokers, builders, housing society developers, car dealers, restaurants, salons etc in the net,” Miftah said.
He added that the taxes will not be “forced’, rather they will be imposed following due consultations.
Earlier on Friday, Prime Minister Shehbaz Sharif had announced a host of new, direct tax measures to enhance government revenues as having been demanded by the International Monetary Fund.
In a speech, Shehbaz said that macroeconomic stability was critical for the country at this point and that politics can come later.
He added that a direct tax on the income of people and industries was being imposed on those with a certain category of income – the super-rich.
The prime minister then announced a 10% ‘super tax’ on a select group of industries.
These large-scale manufacturing industries include:
- Oil and Gas
- LNG Terminals
- Banking sector
Later, Finance Minister Miftah clarified that a super-tax of 4% will apply to all sectors.
But for the specified 13 sectors, another 6% will be added for a total of 10%. “So their tax rates will go from 29% to 39%,” he had explained.
The super tax, he assured, would be a “one-time tax”, needed to curtail the previous four record budget deficits.
Meanwhile, PM Shehbaz also announced a tax on the super-rich including a 1% tax on those earning more than Rs150 million per year, 2% more tax on those with an income of above Rs200 million or more, 3% tax on those earning over Rs250 million and 4% tax on above Rs300 million.