Federal government abolishes super tax for businesses earning Rs150 million to Rs500 million annually and reduces the rate for larger companies to encourage investment and economic growth.
ISLAMABAD: In a major relief measure for Pakistan’s business community, the federal government has announced the complete abolition of super tax for companies with annual incomes ranging from Rs150 million to Rs500 million in the Budget 2026-27.
Presenting the federal budget in the National Assembly, Finance Minister Muhammad Aurangzeb said the decision was aimed at reducing the tax burden on businesses and creating a more investment-friendly environment for industry and trade.
According to the minister, businesses falling within the Rs150 million to Rs500 million income bracket were previously subject to super tax rates ranging from one percent to 7.5 percent. The government has now proposed eliminating the tax entirely for this category.
In another significant move, the government has also proposed reducing the super tax rate for companies earning more than Rs500 million annually. The rate is set to be lowered from 10 percent to 8 percent, providing additional incentives for large-scale investors and corporate entities.
The finance minister said the measures would help strengthen small and medium-sized enterprises, improve investor confidence and stimulate economic activity across various sectors. He added that encouraging private-sector growth remains a key component of the government’s broader economic strategy.
The tax relief package is expected to benefit a wide range of businesses by lowering operational costs and freeing up capital for expansion, hiring and investment. Economic analysts believe the move could improve the overall business climate and support long-term growth objectives.
However, the government clarified that the existing surcharge imposed on banks, oil and gas exploration companies and the fertilizer industry will remain unchanged. Officials said no revisions have been proposed for the taxation framework applicable to these sectors in the upcoming fiscal year.
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