As part of a new industrial policy aimed at revitalizing Pakistan’s manufacturing sector, the government is likely to reduce the super tax rate gradually to 5 percent over the next four years, contingent on International Monetary Fund (IMF) approval. Sources told ProPakistani that the super tax could be fully eliminated in the fifth year if the country’s primary fiscal balance remains positive.
The draft policy, expected to receive cabinet approval later this month, proposes raising the super tax exemption threshold from Rs. 200 million to Rs. 500 million to relieve smaller manufacturers. The threshold for applying a 10 percent super tax is also planned to increase from Rs. 500 million to Rs. 1.5 billion, targeting only larger manufacturing entities.
In addition to tax relief, the policy aims to support struggling industrial units by introducing a bankruptcy framework that facilitates business restructuring. It also promises easier access to credit facilities, helping manufacturers expand operations and improve productivity.
The policy seeks to attract investment and boost exports by safeguarding investor rights and enhancing the manufacturing sector’s competitiveness globally. These reforms are designed to foster a more conducive environment for industrial development and economic growth in Pakistan.
Pending IMF approval, the new industrial policy will soon be presented to the federal cabinet, marking a significant attempt to address the sector’s challenges and stimulate sustainable growth.