• Sun. Aug 7th, 2022

‘Nothing is forced’: Miftah pledges to bring real estate brokers and builders into the tax net – Pakistan

ByWillie M. Evans

Jun 25, 2022

Finance Minister Miftah Ismail promised on Saturday that the government was working to bring restaurants, builders and real estate brokers into the tax net “with consultation” in the coming months.

Responding to a tweet about letting small traders and retailers settle for a flat monthly fee, Ismail said he could only “fight so many battles”.

“We are (smoothly) bringing millions of stores into the tax net. I have introduced jewelers into the net, and rest assured that I will be bringing all of the professionals you mentioned into the net over the next few months,” he tweeted.

The minister said he had discussed with associations of small traders and jewelers to bring them into the net and “have done so with their agreement”.

“Now I will bring real estate brokers, builders, housing company developers, car dealerships, restaurants, salons, etc. onto the net. But nothing forced. With consultation,” he said. -he adds.

Ismail’s tweet was followed by one from Salman Sufi, the PM’s reform adviser, in which he confirmed that real estate, builders, housing corporation developers ‘and more’ were next. on Prime Minister Sharif’s attempt to widen the tax net. “Gradually and in consultation with their representatives to Miftah Ismail,” he added.

Yesterday, the government unveiled new tax measures for both industries and individuals. Addressing a session of the National Assembly convened to wrap up the budget debate, Ismail said a new flat tax scheme on shops outside the tax net under which a small shop owner will pay a fixed fee of Rs3,000 and large retailers Rs10,000 per month.

Will the super tax help the Pakistani economy?.

Retailers dealing in gold and having stores of 300 square feet or less would have to pay a fixed income and sales tax of Rs40,000, which has been reduced by Rs50,000. For larger stores, the sales tax was reduced from 17 to 3 pc.

The withholding tax on gold sold by individuals to goldsmiths has been reduced from 4 to 1 pc. A similar fixed tax regime will be announced for real estate agents, builders and car dealerships.

Separately on Friday, Prime Minister Shehbaz addressed the nation and announced a 10% ‘super tax’ on big industries in a bid to bolster revenue to support the country’s poor amid rising coronavirus. inflation.

Read more: Super Tax – What the state gives, the state takes away

The 13 industries to be taxed include cement, steel, sugar, oil and gas, fertilizers, LNG terminals, textiles, banking, automobiles, cigarettes, beverages, chemicals and Airlines companies.

The Prime Minister said these sectors have made significant profits this year. Entities in other sectors will have to pay this one-time additional tax at the rate of 1% to 4% on their income.

The super tax, the finance minister later clarified, was a “one-time tax needed to reduce the previous four record budget deficits”.

The announcement had come in the hope that the country would soon reach an agreement to release a new tranche of funds from the International Monetary Fund (IMF), necessary to avoid a balance of payments crisis.

During this time, a Dawn Saturday’s editorial said: ‘The super tax will significantly reduce the profits of businesses subject to the super tax and many are likely to put future investment plans on hold and discourage documentation.’

He stressed that the measures taken by the government reflected the “extremely deplorable state” of Pakistan’s economic affairs.