Pakistan's prime minister Shehbaz Sharif has announced a 10% "super tax" on large-scale industries in a bid to consolidate revenues and support the country's poor amid rising inflation, the Dawn reported on June 24.
These sectors include cement, steel, sugar, oil and gas, fertilisers, LNG terminals, textile, banking, automobile, and cigarettes.
In an address to the nation, Sharif said that the coalition government made "courageous" decisions to protect the country from "serious dangers".
Trading at the Pakistan Stock Exchange (PSX) went down crashing by over 2000 points minutes after Pak PM's announcement.
Pakistani authorities have so far raised fuel prices, power tariffs, taxes and have unveiled austerity measures to meet the lender’s requirements.
Funds from the IMF will help avert a potential default, and pave the way for more aid from other multilateral institutions and friendly nations. Pakistan needs at least $41 billion in the next 12 months to repay debt and fund imports.
Pakistan’s foreign exchange reserves have fallen below $10 billion, enough to cover less than two months of imports.
Its headline inflation has quickened to the highest level in more than two years in May, while its currency is down about 17% this year.
Pakistan’s plan to trim its deficit by slashing spending may not be enough to convince the International Monetary Fund to resume its loan program, Citigroup Inc. economists said earlier this month.(With inputs from Bloomberg)