Pakistan FBR considers super tax withdrawal and sales tax cuts

The Federal Board of Revenue (FBR) is considering further tax relief for businesses in Pakistan, including the potential withdrawal of the super tax and reductions in sales tax. During a Senate Finance Committee subcommittee meeting, FBR official Hamid Ateeq Sarwar noted that the government is reviewing these measures to help companies manage rising operating expenses.

As part of recent efforts, the tax rate for exporters has already been reduced from 2% to 1.25%. FBR officials stated that the Prime Minister has provided approximately Rs80 billion in tax relief specifically to the export sector. The government has reportedly provided around Rs361 billion in total tax relief since 2025, including measures for salaried individuals and the elimination of super tax for exporters.

Business representatives at the meeting expressed concerns regarding high taxes, expensive financing, and rising input costs, noting that some industries are operating at only 40% to 45% capacity. They also warned that heavy tax pressures and administrative harassment could lead to the departure of multinational companies from the country. In response, the FBR maintained that current rates are unlikely to trigger an investment outflow and indicated intentions to gradually reduce taxes further in the coming years.