Finance Minister Hints at Ending Super Tax in Pakistan

Finance Minister Muhammad Aurangzeb has signaled the government’s intention to eventually abolish the super tax, saying authorities will continue efforts to gradually phase out the levy in the coming years.

Speaking during a meeting of the Senate Standing Committee on Finance, Aurangzeb said the government’s direction was clear and focused on eliminating the super tax over time.

He added that efforts would continue every year to create fiscal space for further reductions in the levy.

The remarks come days after the government proposed cuts in super tax rates as part of the federal budget for fiscal year 2026-27. The move is aimed at easing the tax burden on businesses and supporting investment and economic growth.

During the committee meeting, Senator Abdul Qadir proposed increasing the income threshold for exemption from the super tax from Rs. 500 million to Rs. 1 billion. However, Federal Board of Revenue Chairman Rashid Mahmood Langrial said such a move would require the government to introduce an additional Rs. 250 billion in tax measures to offset the revenue loss.

The super tax was originally introduced as a temporary measure to raise additional revenue during a period of fiscal stress, but it has since become a significant source of government income. Business groups and investors have repeatedly called for its withdrawal, arguing that it increases the cost of doing business and discourages investment.

The government has already proposed the gradual abolition of the super tax across several income slabs in the latest budget. Officials maintain that any further reductions will depend on improvements in revenue collection and the availability of fiscal space while maintaining commitments under the country’s broader fiscal reform agenda.