Nothing wrong with taxing the rich, sacrifice must be shared: Miftah

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Finance Minister Miftah Ismail said on Thursday that there was nothing wrong with taxing the affluent because they were “able to pay” as he talked about the government imposing additional taxes on industries and wealthy citizens.

“In Pakistan, it is the poor who have always suffered the burden of taxes,” he pointed out at a press conference in Islamabad alongside Information Minister Marriyum Aurangzeb.

“But the Shehbaz-government has decided to impose taxes on the incomes of the rich. This time, we will ensure that the sacrifice is shared,” he said, adding that this was evident in the “progressive” and “historic” budget unveiled for the new fiscal year.

“You have always seen that previous governments imposed taxes on consumption which had a disproportionate impact on the poor. But we have not increased any indirect taxes or taxes on consumption in the budget this time round.”

The minister said the government had decided to impose additional taxes on the rich and some industries — one of them being the sugar industry.

“One per cent tax will be increased on people whose annual income is over Rs150 million, 2pc more taxes for those earning over Rs200 million or more and those earning over Rs250 million will have to pay 3pc additional taxes.”

He added that taxes had been increased even on companies owned by the prime minister’s sons. “Even my company will have to pay more taxes now,” Ismail said, without elaborating further.

Earlier this month, the minister presented the coalition government’s federal budget 2022-23 in the National Assembly, which had a proposed an outlay of Rs9.5 trillion, almost a trillion rupees higher than last year’s outlay.

However, there had been a delay in passing the budget due to reservations by the International Monetary Fund (IMF) over the expenditures projected by the authorities.

On Tuesday, Pakistan and the Fund reached an understanding on the budget after authorities committed to generate Rs436 billion more taxes.

Sources said the government also agreed to impose 1pc poverty tax on firms earning Rs150 million, 2pc on those earning Rs200m, 3pc on over Rs250m and 4pc on Rs300m above. In the original budget, the government had set a 2pc poverty tax only on those earning Rs300m and above.

In today’s press conference, Ismail reiterated that Pakistan had successfully reached an understanding with the IMF over the budget.

“Tomorrow (Friday), I will deliver a winding up budget speech in the NA after which we will close the budget.”

The minister said Pakistan had a habit of taking money from other countries which had resulted in an increase in the country’s overall deficit.

“This progressive budget will diminish our dependency on loans and funds and make us truly independent.”