BUDGET 2022-23: Govt eyes coffers of wealthy to appease IMF.

ISLAMABAD -- The coalition government announced new tax measures on Friday, including a 10 per cent 'super tax' on 13 large industries to raise an additional Rs465 billion in revenue, in an attempt to trim the budget deficit to revive the stalled International Monetary Fund (IMF) loan programme.

High net worth individuals will also be subject to a 'poverty alleviation tax'.

Those whose annual income exceeds Rs150 million will be taxed at 1pc; for Rs200m at 2pc; Rs250m at 3pc; and Rs300m at 4pc of their income.

The announcement comes amid hopes that the country will soon clinch an agreement to unlock a new tranche of IMF funds, which are needed to avert a balance-of-payments crisis.

After he announced the super tax in his morning address to the nation, Prime Minister Shehbaz Sharif's speech triggered a nosedive at the Pakistan Stock Exchange, as its benchmark KSE-100 index saw a sharp 2,053-point drop before trading was halted. As of noon, it stood at 40,663.62, down 4.81pc.

Finance Minister Miftah Ismail later clarified on Twitter that the 'super tax' was a 'one-time tax needed to curtail the previous four record budget deficits'. He elaborated further in his speech in the National Assembly, where lawmakers had gathered to conclude the budget session.

The government also intends to apply a maximum petroleum levy of Rs50 per litre on all petroleum products, including petrol and diesel, besides a levy of Rs30,000 per tonne on liquefied petroleum gas.

At the same time, the Rs47bn tax relief announced by the government in the next year's budget for salaried citizens has also been reversed. The tax exemption limit has been reversed to Rs600,000 from Rs1.2 million, whereas the fixed tax of Rs100 has been replaced with a 2.5pc tax for individuals earning between Rs600,000 and Rs1.2m.

In its first budget, the current government avoided taking unpopular tax measures for fear of political backlash. However, it had to roll back several relief measures after the IMF asked Islamabad to take practical measures to stabilise the economy.

The revenue measures announced on Friday are in addition to taxes worth Rs440bn announced on June 10, meaning the net revenue measures announced in the 2022-23 budget now amount to Rs905bn.

It is also estimated that the bulk of the revenue of more than Rs400bn will come from expected 12.8pc inflation in 2022-23 fiscal year, while the remaining will be contributed by economic growth.

The government has also increased the...