Government plans to phase out super tax, FBR chief tells Karachi industrialists
FBR Chairman Rashid Mahmood Langrial has said the government intends to abolish the super tax in phases, with the rate already cut by two percentage points and work on its gradual elimination under way.
Pakistan's government intends to abolish the super tax in phases, the country's top tax official has said, in what would be a significant concession to the business community after years of complaints that the levy punishes profitable companies.
Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial told members of the Korangi Association of Trade and Industry (Kati) in Karachi on Wednesday that the rate of the tax has already been reduced by two percentage points and that work on its gradual elimination has begun.
"The super tax rate has already been reduced by two percentage points, and work has now begun on its gradual elimination," Langrial said, according to reports of the meeting carried by Dawn and other outlets on Thursday.
The announcement, made during the FBR chairman's visit to one of Karachi's largest industrial bodies, signals a shift in the government's approach to a levy that has been a persistent source of friction between the tax authorities and the corporate sector since it was introduced in 2015.
The super tax is an additional charge imposed on top of ordinary income tax under Sections 4B and 4C of the Income Tax Ordinance, 2001. It applies to taxpayers earning more than Rs500 million, at a rate of 4 per cent for banks and 3 per cent for other sectors.
Business groups have long argued that the levy, originally presented as a temporary measure, has become a permanent burden on formal, documented companies, discouraging investment and expansion. Industrialists at the Kati meeting raised the tax alongside concerns over delayed refunds, difficulties importing raw materials and pressure on working capital.
Langrial paired the super tax announcement with a series of practical measures aimed at easing the relationship between the tax department and industry. He said an FBR office would be established at Kati to deal with tax questions from industrialists in the Korangi Industrial Area, and that the board's existing help desk would be extended from Karachi to Sukkur.
He also promised consultations with stakeholders to address shortcomings in the procedures governing raw material imports, and said meetings would be held on border-trade issues faced by the leather industry. The FBR's Track and Trace System, he added, would be made operational for the pharmaceutical industry on the model of the Drug Regulatory Authority of Pakistan.
The announcement comes at a delicate moment for the levy in the courts. Earlier this week, the Federal Constitutional Court reserved its decision on petitions seeking a review of its January 27 ruling upholding the super tax. A three-member bench led by Chief Justice Aminuddin Khan heard challenges filed by companies and the Defence Housing Authority, Lahore. The earlier judgment held that Parliament could impose or amend the tax through a Finance Act and upheld Sections 4B and 4C of the ordinance.
For now, the chairman's remarks amount to a stated government intention rather than an enacted change. No notification, ordinance or timetable for the abolition has been published, and neither report of the meeting set out when the two-percentage-point reduction took effect or how the phasing would be scheduled, leaving companies unable to calculate precisely what their super tax bill will be for the current year.
That uncertainty means the real test will be what follows: whether the government sets out a clear schedule in the next budget or through a finance bill, and whether the courts' pending review decision changes the picture. Industrialists will also be watching whether the promised FBR office at Kati and the wider help desk actually speed up refunds and clear import bottlenecks.
If the phase-out proceeds, it would mark one of the most significant tax concessions to business in recent years, and a signal that the government is prepared to trade short-term revenue for longer-term investment and documentation. Figures in this post were checked at 14:52 PKT on 5 November 2026.
This post is market news information only, not financial advice.
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