Pakistan Stock Exchange crashes after 10% tax on industries

By Ovunc Kutlu

ANKARA (AA) - The Pakistan Stock Exchange (PSX) crashed on Friday shortly after Prime Minister Shehbaz Sharif unveiled a massive 10% tax on major industries and additional taxes on high income individuals.

PSX plunged almost 7% to 10.00 from the previous day's closing of 10.75.

KSE-100 Index, which acts as a benchmark to compare prices on PSX, was down 4.8% to 40,663.62 points at 0820GMT, after closing Thursday at 42,716.97.

Trading was halted in both PSX and KSE-100 as of 0836GMT.

If the index rises or falls 5% compared to the previous day's closing and remains there for five minutes, trading is halted for some period, according to PSX rules.

The crash came after Sharif announced a "super tax" on major sectors, which include banking, steel, auto, oil and natural gas, chemicals, fertilizers, textile, sugar, beverages, and cigarettes.

A separate "poverty alleviation tax" was also introduced on high net worth individuals who have an annual income of 150 million to 300 million Pakistani rupees ( $725,000 to $1.45 million)

The tax amount will range from 1% to 4% of their annual income.