- Finance minister says will bring real estate brokers, builders, housing society developers, car dealers, restaurants, salons etc in the tax net
Finance Minister Miftah Ismail on Saturday vowed to expand the tax net in the next few months, including real estate brokers, builders, housing society developers, car dealers, restaurants, salons etc., as the government desperately looks at avenues to enhance its tax collection.
The minister shared the development while responding on Twitter to Interloop CEO Musadaq Zulqarnain who stated that the restoration/increase of tax on individuals with salaries up to Rs200,000 per month is not a good step when retailers and traders are being let go with a small fixed tax.
"No steps visible to make professionals like designers, lawyers, doctors etc pay full tax," tweeted Zulqarnain.
The finance minister responded by saying that the government was making efforts to expand the tax net.
"I can fight only so many battles," he said. "We are bringing in (gently) millions of shops into the tax net, I have brought jewellers into the net, and rest assured I will bring in all the professionals you mentioned in the net over the next few months.
"To bring small shopkeepers & jewellers into the net, I talked to their associations & did so with their agreements. Now I will bring in real estate brokers, builders, housing society developers, car dealers, restaurants, salons etc in the net. But nothing forced. With consultation."
The exchange comes after the government on Friday announced a 10% poverty alleviation tax or super tax on large industries in the "bid to relieve the general public of tax pressures".
“The collection from this tax will be used to alleviate poverty in Pakistan and will be funded by the high income earners,” Prime Minister Shehbaz said after a meeting with the government’s economic team.
The tax will be applicable to cement, steel, sugar, oil and gas, fertiliser, LNG, textile, banks, automobile, beverages, chemicals and tobacco sectors. Later, finance minister Miftah Ismail also mentioned airlines as among those included in the list, taking the total of 13 sectors.
The announcement led to massive selling at the Pakistan Stock Exchange (PSX), which lost over 2,000 points in less than 20 minutes between 11:40 and noon on Friday. The market settled at 41,051.79, still a fall of 1,665.18 points or 3.9%.
However, the super tax on big corporates is likely to help the coalition government to collect more than Rs200 billion which would be an integral part of the additional tax measures of Rs436 billion agreed with International Monetary Fund (IMF) in Budget FY23, experts said.