Prime Minister Mian Muhammad Shahbaz Sharif in a press conference held today has imposed a 10% “super tax” on all big industries in the country and that includes automobile industry as well. The PM said this new tax will help in poverty alleviation.
The target of this super tax are large-scale manufacturers including oil, fertiliser, steel , sugar, automobile and textile. It means that commodities like cement, steel, sugar, oil and gas, fertiliser, banking, textile, chemical, beverage, cars, bikes, and heavy machinery including farming machines will be affected. It is yet to be known whether this tax will trickle down to the end consumer as well or is it something that only the manufacturers will be expected to pay.
It was further said,
1% tax has been imposed on those earning over Rs150 million, 2% on those earning over Rs200, 3% on those earning over Rs250 million and 4% on those earning over Rs300 million,
But considering the nature of most business owners including these big companies, you can say this with certainty that the car companies will just defect this extra tax towards the end buyers and we will end up paying it for these companies.
Even if the burden of full tax is not diverted to the consumers, it is quite possible that some of the portion of the tax will be taken from buyers by these companies by force.
Keep in mind the tax is not just about taxing the carmakers, it is also about taxing all big manufacturers. And that includes automobile associated industries like car parts, accessories and lubricant makers and sellers as well. So expect the parts of the cars to get expensive as well.
With petrol and diesel at an already highest point in the history of the country, along with the proposed new budget taxes on vehicles having 1600cc and above engines, and now vehicles as well as their parts are also going to get affected with this super tax, the nation sees a dark future ahead considering the buying powers of the consumers have reduced significantly due to the current mind-blowing inflation.
Do you agree with this decision? Do you think this super tax will help improve the poverty levels of the people of Pakistan? Or is it just another way to squeeze more out of the middle class of the country? Let us know in the comments.