FBR Plans to Scrap Super Tax in Phases
Super tax abolition is now the stated direction of the Federal Board of Revenue, with the levy to be removed in phases rather than in one step. FBR Chairman Rashid Mahmood Langrial told industrialists in Karachi that the government intends to abolish the super tax completely, and that work on its gradual elimination has already begun.
Langrial spoke during a visit to the Korangi Association of Trade and Industry (KATI) on Wednesday. He said the super tax rate has already been reduced by two percentage points, and the board is now working through the next stages of the phase-out. The announcement was reported by Dawn, Business Recorder, Tribune and ProPakistani, all carrying the same core commitment from the KATI meeting.
Super tax abolition: what the FBR chairman promised
The FBR chief paired the phase-out pledge with a set of practical steps for Karachi’s industrial estates. An FBR office will be set up at KATI to handle tax issues faced by industrialists in the Korangi Industrial Area, and the board’s help desk will be extended from Karachi to Sukkur. The board will also consult industrialists on fixing shortcomings in the system for importing industrial raw materials.
Two sector problems were named in the meeting. Langrial said meetings will be held to resolve cross-border trade problems faced by the leather industry. For pharmaceuticals, he said a model similar to the Drug Regulatory Authority of Pakistan (DRAP) system is being considered to make the Track and Trace system work better, and he asked the business community to cooperate against tax evasion so the system can become more transparent.
Industrialists at the meeting pressed their own list. KATI President Sheikh Umer Rehan welcomed the chairman’s monthly visits to Karachi and called for simpler raw material import procedures, along with the release of billions of rupees in pending tax refunds within the set time. Industrialist leader Zubair Chhaya proposed an FBR focal person at KATI, a review of unnecessary regulatory orders, and a one-window operation. The industrialists also urged the government to broaden the tax base instead of adding further burdens on taxpayers who already pay.
Why the super tax matters to industry
The super tax has been a running complaint from large taxpayers since it was introduced in 2015. It applies to taxpayers earning more than Rs500 million a year, at 4 per cent for banks and 3 per cent for other sectors, according to TechJuice. A Senate briefing on October 24 put the recent history in numbers: the rate for businesses earning more than Rs500 million a year had been reduced from 10 per cent to 8 per cent, with a further cut promised when fiscal space allowed. Langrial’s two-point reduction matches that account, and his phase-out pledge goes further than the Senate briefing did.
The pledge also lands while the tax itself is before the courts. Feature Pakistan reported that the Federal Constitutional Court has reserved its ruling on review petitions against its January 27 decision upholding the super tax. A political promise to phase the levy out does not settle that litigation, and no timetable for the phase-out was given at the KATI meeting.
What happens next
For now, the signal to large taxpayers is clear. The FBR’s own chairman has said the super tax is on its way out, in stages. The board’s earlier moves on deadlines, including the second extension of the 2026 income tax return deadline, and its digital production monitoring for the steel industry, show a board trying to pair enforcement with relief, alongside a mineral incentive package for investors. The super tax phase-out will be judged the same way: by dates, notifications and refunds, not by announcements alone.
Frequently asked questions
What did the FBR chairman announce on the super tax?
Rashid Mahmood Langrial said the government intends to abolish the super tax completely, in phases, and that work on its gradual elimination has begun.
By how much has the super tax rate already fallen?
The rate has been reduced by two percentage points. A Senate briefing on October 24 described the cut as from 10 per cent to 8 per cent for businesses earning more than Rs500 million a year.
Who does the super tax apply to?
It applies to taxpayers earning more than Rs500 million a year, at 4 per cent for banks and 3 per cent for other sectors.
What practical steps did the FBR promise at KATI?
An FBR office at KATI, an extension of the help desk from Karachi to Sukkur, consultation on raw material import procedures, meetings on leather industry trade problems, and a DRAP-style model for the pharmaceutical Track and Trace system.
Has the super tax actually been abolished?
No. The announcement sets out an intention and a phased approach, with no timetable given, and review petitions on the tax are still before the Federal Constitutional Court.
