Packages made billions in 2025. The government took almost all of it away in taxes

There are years in which a conglomerate struggles because demand is weak, costs are out of control, or debt has become unmanageable. And then there are years like Packages Ltd’s 2025, when the operating story looks respectable enough, only for the state to arrive at the bottom of the income statement with an outstretched hand. On a consolidated basis, Packages and its subsidiaries generated Rs193.2 billion in revenue, Rs39.5 billion in gross profit and Rs20.9 billion in operating profit. Profit before levy and income tax came to Rs6.30 billion, a notable recovery from Rs1.44 billion a year earlier. Yet after a levy of Rs1.26 billion and income tax of Rs4.79 billion, profit for the year was just Rs260.6m. In other words, the group made billions, and then almost all of it disappeared into Pakistan’s fiscal machinery.

The first part of the story is, in fact, rather healthy. Revenue rose 9.3% in 2025, while cost of sales and services rose more slowly, allowing gross profit to climb 15.9% to Rs39.46 billion from Rs34.05 billion. That widened the consolidated gross margin to about 20.4% from 19.3% a year earlier. For a manufacturing-heavy group that spans packaging materials, films, paper, inks, starches, pharmaceuticals and real estate, that sort of expansion is meaningful. It suggests that the group was not merely selling more, but selling more profitably at the gross level. Operating profit rose too, though far less dramatically, reaching Rs20.9 billion against Rs19.8 billion in 2024, as higher administrative, marketing and other operating expenses absorbed part of the gain. Finance costs, however, fell sharply to Rs14.6 billion from Rs18.4 billion, helping pre-levy, pre-tax profit more than quadruple year on year.

Then comes the extraordinary part. Packages’ combined levy and income tax bill amounted to Rs6.04 billion, leaving behind only Rs260.6m in consolidated profit. Measured against profit before levy and income tax, that means roughly 95.9% of what the group earned before the state’s claim was taken away, leaving only about 4.1% behind. The levy alone consumed almost a fifth of pre-levy profit, while income tax consumed about three-quarters. The consolidated accounts therefore tell a striking story: not that Packages failed to earn money in 2025, but that the tax system absorbed nearly all of it. And because non-controlling interests accounted for Rs2.10 billion of the remaining earnings, the amount attributable to owners of the parent company was still a loss of Rs1.84 billion. The group as a whole scraped into the black; the parent’s shareholders did not.

That burden did not appear out of nowhere in the final quarter. In its half-year 2025 report, management had already warned that the surge in levy and income tax was “mainly attributable” to the derecognition of minimum taxes from prior years after the Finance Act 2025 reduced the period for recoupment of minimum taxes from three years to two. That detail matters, because it shows that Packages’ tax problem was not simply the result of one profitable year meeting the ordinary corporate tax code. It was also the product of Pakistan’s more inventive fiscal habits: super taxes, levies, and rule changes that reach back into balance-sheet assumptions companies thought were still usable. By the second half, the effect was fully visible in the annual numbers.

The legal backdrop to that levy is Pakistan’s super-tax regime. Section 4B of the Income Tax Ordinance is explicitly titled “Super tax for rehabilitation of temporarily displaced persons,” while section 4C is titled “Super tax on high earning persons.” Section 4B applies from tax year 2015 onwards; section 4C applies from tax year 2022 onwards. Under the rate schedule in force for tax years 2023, 2024 and 2025, income above Rs500m attracts a 10% super tax under section 4C. In plain English, this is not the ordinary corporate income tax at all. It is an additional fiscal layer, imposed on top of normal taxation, and for large profitable companies it can materially transform what looks like a solid year into a meagre one.

The original political case for the super tax was, at least in theory, temporary and exceptional. As Dawn reported from proceedings before Pakistan’s Federal Constitutional Court, the levy was first imposed in 2015 through a money bill, with the stated purpose of rehabilitating areas affected by the Zarb-i-Azb military operation and rebuilding for temporarily displaced persons. What began as a one-off measure for a national emergency, however, has proved to have the institutional durability that emergency taxes so often acquire. Over time it ceased to look like a temporary impost and began to resemble part of the permanent architecture of Pakistani corporate taxation. That is why companies such as Packages can post improving operating numbers and still find themselves with accounts that feel less like a profit statement than a surrender document.

Packages Ltd was established in 1956 as a joint venture between the Ali Group of Pakistan and Akerlund & Rausing of Sweden. It began in folding-carton packaging, integrated upstream in 1968 with a pulp and paper mill based on waste paper and agricultural by-products, launched the Rose Petal tissue brand in 1981, and added flexible packaging capacity in 1986. The company has been listed on the Pakistan Stock Exchange since 1965 and today describes itself as an investment-holding company with stakes in subsidiaries, joint ventures and other companies across a range of sectors. The corporate website still presents the old industrial ambition in straightforward terms: a Pakistani manufacturing house that kept moving upstream, sideways and abroad as opportunities emerged.

That ambition is now visible in the company’s sprawl. According to Packages’ corporate briefing and company materials, the group includes Packages Convertors, Bulleh Shah Packaging, Tri-Pack Films, DIC Pakistan, Packages Real Estate, Packages Lanka, Hoechst Pakistan, StarchPack and Packages Trading FZCO, alongside other subsidiaries and stakes in joint ventures and investments such as OmyaPack and IGI Holdings. Through those holdings, the group touches folding cartons, flexible packaging, tissue and consumer products, paper and board, corrugated packaging, BOPP and CPP films, printing inks, industrial minerals, starches, medicines, mall real estate, trading and financial services. It is still recognisably a packaging group, but it has become a distinctly Pakistani sort of conglomerate, where the original manufacturing core has thrown off subsidiaries in adjacent sectors, services and geographies.

The recent initiatives tell the same story of diversification and repair. In the 2024-25 period, Packages injected capital and financial support into two wholly owned subsidiaries that plainly needed it: StarchPack and Bulleh Shah Packaging. By mid-2025, the parent had arranged term-finance facilities to back support for both businesses, while its corporate briefing highlighted the capital injections as key announcements of the year. StarchPack, the group’s corn-based starch venture in Kasur, remained loss-making in the first half of 2025, but management said it was pushing towards a more stable second half through a wider portfolio, especially in value-added starches, better production efficiency and tighter corn procurement. Bulleh Shah Packaging, meanwhile, was battling unrestricted imports, an adverse sales mix, and input-cost pressure that it could not fully pass on. These are not vanity projects. They are large industrial bets, and in 2025 the parent company was still visibly carrying them.

Other parts of the empire looked livelier. Packages Trading FZCO, the Dubai-based subsidiary established in 2022 and operational from October 2023, posted turnover of USD29m in 2024 on the company website, while the half-year 2025 report showed first-half revenue of AED106m, more than four times the comparable period a year earlier. Management said it expected the unit to provide both export and import synergies for the group over time. DIC Pakistan, the printing-inks business, had successfully relocated and was aiming to commence commercial operations from its new site in Kasur during the third quarter of 2025. Hoechst Pakistan, formerly Sanofi-Aventis Pakistan, continued to be a bright spot, with half-year 2025 revenue up 22% and profit before levy and income tax up 45%, helped by sales growth, favourable mix and tighter working capital management. Packages, in short, is still investing, still integrating, still reorganising. It is not the picture of a static old industrial family holding company living off dividends and memories.

Then there is the sustainability agenda, which in Packages’ case is no longer mere brochure language. In February 2025, the group said it had installed over 22MW of solar capacity across the group, with another 5MW-plus in the pipeline, and highlighted a 45MW biomass boiler at Bulleh Shah Packaging as one of the largest in Pakistan. By the end of December 2025, during its World Energy Conservation Week campaign, the group was describing 27MW of solar capacity across the group, alongside the biomass boiler, a solvent recovery plant and ISO 50001-related energy-management efforts. This is not just climate branding. For a manufacturing conglomerate operating in Pakistan’s energy environment, renewable and efficiency investments are also a form of margin defence. They are the sort of long-horizon industrial choices that help explain why gross margins could improve even in a difficult macroeconomic setting.

The softer initiatives matter too, if only because they show how Packages wants to think of itself. In November 2025, the company announced that it had been approved by the Institute of Chartered Accountants of Pakistan as a Training Organisation Outside Practice, presenting the accreditation as part of a broader effort to develop young finance professionals. That is not a line item in the financial statements, but it does say something about the group’s self-image: not merely as a cluster of factories and subsidiaries, but as an institution trying to replenish its managerial bench while it keeps expanding into new businesses. Conglomerates endure by training successors as much as by financing plants.

And so Packages ends 2025 with a paradox. At the industrial level, it looks sturdier than the headline profit figure suggests. Revenue is up, gross margins are better, finance costs are lower, and several subsidiaries are either scaling up, being repaired or both. But at the fiscal level, the message is brutal. Pakistan’s tax state managed to turn Rs6.30 billion of profit before levy and income tax into just Rs260.6 million of profit for the year. That is the sort of outcome that makes even a growing conglomerate look anaemic. The trouble with confiscatory taxation is not simply that it takes money away. It also distorts the story a company’s accounts are trying to tell. In the Packages’ case, the underlying story in 2025 was one of industrial resilience. The reported one was that the government got there first.