The Pakistan Stock Exchange nosedived 2,053 points as Prime Minister Shehbaz Sharif announced the imposition of a 10 percent super-tax on large-scale industries for revenue generation and supporting the poor.
In an address to the nation on Friday, the PM had announced 10 percent super tax on oil and gas, cement, steel, LNG terminals, fertilizers, sugar, textile, beverages, chemicals and cigarettes.
The speech of PM coincided with a nose-diving stock exchange. The Pakistan Stock Exchange (PSX) witnessed abrupt selling pressure as KSE-100 index fell down more than 2,053 points or 4.8 percent in the intraday trading on Friday.
PM Shehbaz in his address said that the coalition government had taken tough budget decisions for safeguarding the country from serious threats. He said that the government could call for fresh elections or it had to take tough decisions to tackle the sinking economy. He stated that the government had chosen the second option; adding that the affluent citizens should do their part.
Shehbaz Sharif said that the institutions related with tax collection should collect it from the rich and provide relief to the poor. He termed the tax money not going to national treasury as lack of success of the state, including the PM.
Talking about the agreement with IMF, he said that the government was close to an agreement, provided the fund does not impose any more conditions.
Meanwhile, market experts have termed the massive fall of points in the stock exchange a result of the announcement of 10 percent tax on large scale industries by Prime Minister Shehbaz Sharif.
Within the opening two hours, PSX sank to 41,100 after losing 1,598 points. At 12:00pm, KSE-100 index went down 2,053 points or 4.8 percent.
According to experts, significant increase/decrease up to 5 percent halts all trading for a specific period, according to Pakistan Stock Exchange Rulebook.
Financial experts have called today’s trading phenomenon a cause of the highest tax in the history of Pakistan. Experts have started to raise concerns that the levies on investor tax and corporate income tax may cross 55 percent and 50 percent respectively.