The government has announced a new industrial policy aiming to gradually lower the super tax rate for the manufacturing sector over the next five years. Under the plan, the super tax will be reduced to 5 percent within four years and completely removed in the fifth year, contingent upon achieving a primary budget surplus.
Sources reveal that the federal cabinet is set to approve this policy later this month, which also proposes increasing the minimum profit threshold for super tax applicability from the current Rs 200 million to a higher level. The draft policy suggests raising the threshold first to Rs 500 million, and for imposing a 10 percent super tax, elevating it further to Rs 1.5 billion. This change aims to target only highly profitable corporations, with calls to limit super tax to firms earning profits exceeding Rs 10 billion.
Beyond tax reforms, the policy outlines measures to revive financially struggling industrial units, rationalize manufacturing tax rates, and establish a bankruptcy framework for banks. It also emphasizes easier access to credit for manufacturers, ensuring investment protection, and promoting export growth from the sector through various supportive initiatives.
