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Pak industry vows to resist super tax

Published : Sunday, 26 June, 2022 at 12:00 AM  Count : 96

LAHORE, June 25: The prime minister's announcement of imposing a 10 per cent Super Tax on the country's major industry has only panicked the manufacturers, leaving them with no option but to resist the plan by all means.
While criticising and expressing wonder over the government's anti-industry steps in various forms including least interest in broadening the tax net and extracting more from already heavily taxed, the trade and industry leaders have sought an immediate withdrawal of the plan in a bid to save the industry as well as the end-users from its adverse impact.
Federation of Pakistan Chambers of Commerce and Industry Acting President Shabbir Mansha in a press statement has categorically denounced the imposition of 10pcsuper tax on large industries; which already pay hefty corporate tax of 29pc and generate millions of jobs in the country as well. "No country in the world can charge 39pc tax to corporations and still keep the economy afloat. Additionally, new private-sector and foreign investments dry up completely in an uncompetitive market, he added.
He also expressed his shock that the federal budget 2022-23 was announced just two weeks back and it mentioned no super tax on industries. It is a highly abrupt, unfortunate and anti-industry measure.
Stakeholders claim consumers will be ultimate victims of this 'harsh step'
Mansha explained that industries affected will include all major industries; namely, cement, steel, sugar, oil & gas, fertilisers, LNG terminals, textiles, banking, automobiles, cigarettes, beverages, chemicals and airlines - and, these are 13 industries in total. Furthermore, all the remaining industries will be subjected to a 4pc additional tax.
"We reject and will resist this plan by all means. And soon we will arrange a meeting of all stakeholders by taking up the issue with the government," Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) Chief Organiser told Dawn on Friday.
"This is unacceptable, as it, simply, affects a huge number of end-users of the garments industry," Mr Khokhar said, questioning why the government is reluctant to broaden the tax net instead of burdening the existing ones.
Talking to Dawn, Altaf Hussain Saqib, head of commercial banking, SMEs and agriculture at a major bank, said that in principle, such tax shouldn't be passed on the respective industry's end users since it is supposed to be imposed on the profit of the industries' owners and not the end users/public at large.
"But unfortunately, in Pakistan, we don't have a proper mechanism to check and regulate the prices of a wide range of things/articles and the profits earned by the manufacturers or other industry. Due to this factor, the industry will certainly try to pass on this tax to the consumers and this needs to be strictly checked by the government. However, the banking industry, he adds, may not dare to pass on the tax to its customers keeping in the view the strict regulations and monitoring by the State Bank of Pakistan," he explained.    -Dawn










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