ISLAMABAD – The federal government has decided to gradually reduce the super tax rate for the manufacturing sector as part of its upcoming industrial policy.
The reform aims to boost investment, encourage industrial growth, and enhance competitiveness in the sector.
Under the proposed framework, the super tax rate for manufacturers will be reduced to 5 percent over the next four years. In the fifth year, the super tax will be completely phased out, provided that the government achieves a primary budget surplus. This phased reduction is intended to provide fiscal relief while maintaining economic stability.
According to sources, the federal cabinet is expected to approve the new industrial policy later this month. One of the significant proposals is to raise the minimum threshold for super tax in the manufacturing sector from Rs 200 million to Rs 500 million. The draft also suggests increasing the income threshold for the 10 percent rate from Rs 500 million to Rs 1.5 billion.
The new policy package includes initiatives to revive struggling industrial units, rationalize tax rates, introduce a bankruptcy framework for banks, and improve access to credit for manufacturers. It also focuses on export growth, investment protection, and creating a more predictable business environment to attract both local and foreign investors.