Govt to Cut Super Tax & Boost Manufacturing Reforms
Government to Gradually Cut Super Tax for Manufacturers, Introduce Key Industrial Reforms
According to reliable sources, the government plans to gradually reduce the super tax rate for the manufacturing sector to 5% over the next four years. If the country achieves a primary fiscal surplus by the fifth year, the super tax will be eliminated.
The new industrial policy, which includes these changes, is expected to be presented to the federal cabinet for approval later this month. One of the proposed reforms is to raise the minimum income threshold for imposing the super tax. Currently set at PKR 200 million, the government aims to increase this to PKR 500 million.
In addition, the threshold for the 10% super tax is also proposed to rise from PKR 500 million to PKR 1.5 billion.
The policy draft further outlines steps to revive struggling industrial units and streamline tax rates within the manufacturing sector. Other important measures include introducing a bankruptcy framework, improving manufacturers’ access to credit, providing investment protection, and boosting exports from the manufacturing sector.
In a related update, the Federal Board of Revenue (FBR) has introduced changes to the income tax regulations for the fiscal year 2025-26. These amendments aim to widen the tax base and discourage non-compliance.
Under the new rules, non-filers who withdraw more than PKR 50,000 daily from their bank accounts will now face a withholding tax of 0.8% on these transactions, up from the previous rate of 0.6%.
The revised tax regulations specifically target undocumented cash transactions and encourage more people to file their tax returns.
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