Finance minister signals phased withdrawal of controversial super tax

ISLAMABAD: Finance Minister Muhammad Aurangzeb signaled on Monday a phased withdrawal of the controversial corporate “super tax,” while expressing confidence that deep-seated economic reforms would drive further capital market growth in the coming fiscal year.

Speaking before the Senate Standing Committee on Finance, Aurangzeb emphasised that the government is committed to easing the tax burden on top-tier corporate earners to spur investment.

“Our direction is very clear: we intend to abolish the super tax,” Aurangzeb told the committee. “We will continue our efforts to gradually phase it out every year.”

The super tax, originally introduced as a temporary levy on high-earning sectors to meet revenue shortfalls, has long been criticized by the country’s business community as a deterrent to corporate growth.

During the session, committee member Senator Abdul Qadir suggested doubling the income threshold for the super tax exemption from Rs500 million to Rs1 billion. However, the Federal Board of Revenue (FBR) chairman cautioned that such a move would create an immediate fiscal hole, requiring 250 billion rupees in alternative taxation measures to meet revenue targets.

Meanwhile, addressing the Pakistan Stock Exchange (PSX) via video link, the finance minister struck an optimistic tone regarding macro-economic stability and foreign investment for the 2026-27 fiscal year.

Aurangzeb highlighted the changing nature of economic ties with Beijing, noting that Prime Minister Shehbaz Sharif’s recent visit to China successfully transitioned the multi-billion-dollar China-Pakistan Economic Corridor (CPEC) into a business-to-business (B2B) framework.

“B2B relations between Pakistan and China are improving day by day,” Aurangzeb said, adding that the country’s capital market offers unparalleled returns. “The kind of profit Pakistan offers is unmatched by any other stock market in the world, and we expect further economic improvement in the upcoming fiscal year.”