Finance Minister Miftah Ismail elaborated on Friday that the government’s recently-announced indirect tax (super tax) is aimed to helping the state accumulate funds under the head of tax collection and narrow down the budget deficit.
He was referring to the 10% poverty alleviation tax, or super tax, imposed on large industries. The announcement was made by Prime Minister Shehbaz Sharif on Friday morning.
Speaking in the National Assembly, Miftah said that this tax is a one-time levy, and will be imposed on 13 sectors ie sugar, cement, steel, textile, tobacco, fertiliser, bank, oil and gas, beverages, automobile, chemical, airlines and LNG terminals.
“These 13 industries made huge profits last year and hence, they were identified by the government for super tax,” he said.
He added that companies earning more than Rs300 million within these sectors would pay 10% super tax.
“This tax is a one-time levy and it will only be applicable for fiscal year 2022-23,” he said.
Taking to twitter, he clarified that the super tax of 4% will be applicable to all sectors.
“For the specified 13 sectors, another 6% will be added for a total of 10%,” he said. “So their tax rates will go from 29% to 39%. This is a one-time tax needed to curtail the previous four record budget deficits.”
Companies from other sectors earning more than Rs150 million would be liable to pay 1% super tax while firms making over Rs200 million would pay 2% tax. These are additional taxes on top of existing rates.
Companies making more than Rs250 million in income would pay 3% super tax and those earning over Rs300 million would pay 4% super tax.
Citing figures, he added that there were 9 million retail and wholesale outlets in Pakistan and the government was aiming to add 2.5-3.5 million into the tax net.