Karachi, May 1, 2025 — The Karachi Tax Bar Association (KTBA) has strongly called for the complete abolition of the super tax in its detailed budget proposals for the fiscal year 2025–26.
The association has raised serious concerns about the continued imposition of this tax, stating that it hampers business growth and discourages investment in Pakistan’s formal economy.
In its submission, the KTBA specifically pointed to Section 4C of the Income Tax Ordinance, 2001, under which the super tax is currently levied. The association argued that the tax, which was originally introduced under Section 4B as a temporary measure to meet specific fiscal needs, has now become a permanent burden without a defined time limit—a move the KTBA describes as “unjustified and counterproductive.”
The KTBA believes that maintaining the super tax deters companies from reinvesting profits, planning long-term strategies, and expanding operations. “The persistent application of super tax sends a negative signal to the business community and stifles entrepreneurial activity,” the association stated in its recommendations. “Its removal would boost economic confidence and help create a more favorable environment for sustainable growth.”
Backing KTBA’s stance, the Overseas Investors Chamber of Commerce and Industry (OICCI) has also voiced concerns over the super tax, calling it a “recurring burden on high-earning entities.” In its own set of recommendations, the OICCI has proposed a phased withdrawal of the tax, suggesting it be fully eliminated over a three-year period.
The OICCI maintains that the super tax, while originally introduced as a one-time levy on high-income businesses, has now morphed into an unpredictable annual charge that complicates financial planning. This uncertainty, the Chamber warned, erodes investor confidence and reduces Pakistan’s attractiveness as an investment destination in an already competitive regional landscape.
Both the KTBA and OICCI agree that reforming the current taxation framework is vital for economic revival. They urge the government to prioritize policy consistency and growth incentives over ad hoc revenue measures like the super tax. A business-friendly tax regime, they argue, would increase compliance and ultimately generate higher, more sustainable revenues for the state.