Finance Minister Signals Gradual End to Super Tax in Pakistan

Finance Minister Muhammad Aurangzeb has indicated that the government is moving toward the eventual elimination of the super tax, describing recent reductions as a significant step in that direction. The development is part of broader efforts to improve the business environment, encourage investment, and support export-led economic growth.

Under the proposed 2026-27 federal budget, six super tax slabs applicable to businesses earning between Rs150 million and Rs500 million annually have been abolished. For larger companies with income exceeding Rs500 million, the super tax rate has been reduced from 10 percent to 8 percent.

Speaking after the budget announcement, Aurangzeb stated that the government had also proposed abolishing the super tax for exporters, following directives aimed at enhancing Pakistan’s export competitiveness. He described the reduction from 10 percent to 8 percent as a meaningful move toward a more business-friendly tax framework.

The changes are being viewed as a positive signal for the corporate sector, particularly for businesses that have long argued that the super tax increases the cost of operating in the documented economy. Industry groups have repeatedly called for its removal, saying it discourages investment and expansion.

While the government continues to balance revenue targets under its economic reform agenda, the latest measures suggest a gradual shift toward reducing the tax burden on businesses and creating a more competitive environment for economic growth and exports.