The Pakistan Stock Exchange (PSX) on Friday witnessed a bloodbath as the benchmark KSE-100 Index plunged after Prime Minister Shehbaz Sharif’s announced a tax on large industries.
PM Shehbaz Sharif said the government would impose a 10 per cent “super tax” or poverty alleviation tax on large industries that “will be used to alleviate poverty in Pakistan and it will be funded by large industries, Business Recorder reported.
Following the announcement, the benchmark index was being traded at 40,661.59, a loss of 2,055.38 points or 4.81%.
These sectors include cement, steel, sugar, oil and gas, fertilisers, LNG terminals, textile, banking, automobile, and cigarettes.
On Thursday, the benchmark KSE-100 Index had closed 0.61% higher, while the volume and value of shares traded also improved substantially.
Read more: PSX lost 923 points amid hikes in fuel and energy prices
In an address today, the PM took the nation into confidence over what he described as “tough” budget decisions. He said that the coalition government made “courageous” decisions to protect the country from “serious dangers”.
Super Tax will end up further squeezing the formal sector of the economy. This means Taxing the already taxed even more. The economy is nosediving and such a measure at this time will reverse the industrialisation momentum that PTI generated.
— Hammad Azhar (@Hammad_Azhar) June 24, 2022
He recalled that the government had two options when it first came to power: call fresh elections or take tough decisions and tackle the sinking economy. “It would have been very easy to leave the public in crisis and become silent spectators like others.”
And despite the challenges, the prime minister pointed out, the government chose the latter.
He said history had witnessed that in difficult times, it was the poor people who always made sacrifices. “Today, it is time for the affluent citizens to do their part. It is their turn to show selflessness. And I am confident that they will contribute fully to play their part.”
But PTI claimed that the measures would instead further burden the public through higher prices. Former federal minister and PTI leader Hammad Azhar said that the super tax meant “taxing the already taxed even more” and would “squeeze the formal sector of the economy.”
Industry is already facing crippling costs due to rising prices of commodoties 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. https://t.co/4op4vlgKg1
— Hammad Azhar (@Hammad_Azhar) June 24, 2022
Azhar highlighted that the industry was already facing crippling costs due to rising commodities and energy prices. “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.”
Former information minister Fawad Chaudhry said that the PSX nosedive showed the nation’s confidence in the Shehbaz-led government.
“The government’s economic policies are making Pakistan bankrupt. Getting rid of this govt is in the best interest of Pakistan,” he said.
Meanwhile, ex-finance minister Shaukat Tarin said that the market didn’t believe in the PML-N government anymore.
Miftah Mian,with an overseas PhD, should have enabled you to acknowledge your own approved Economic survey which documents stellar PTI performance in the last two https://t.co/uJuVUKm6n1 refuse to accept it as it exposes your https://t.co/xmC7X4duMk does not believe you.
— Shaukat Tarin (@shaukat_tarin) June 24, 2022
Additional input from Dawn