ISLAMABAD: The IMF (International Monetary Fund) stressed on the Pakistan government that all pending recoveries be completed within a month after the Supreme Court verdict favoured the Super Tax.
According to sources, virtual discussions were held between the FBR (Federal Board of Revenue) and the IMF after the Supreme Court announced its verdict on Tuesday.
The IMF expressed satisfaction over the court decision on super tax and emphasized the need to meet tax collection targets, the sources added.
The FBR has estimated super tax collections of nearly Rs375 billion by the end of the current fiscal year of which around Rs300 billion is expected to be recovered within the next few days.
The FBR officials told Dunya News that by December 2025, super tax liabilities of large business units amounted to approximately Rs340 billion while an additional Rs40 billion is expected to be collected by June 2026. They expressed the confidence that the revenue shortfall would be eliminated by December through super tax recoveries.
The board has also updated the prime minister and the IMF on the super tax case verdict. The prime minister was informed that the revenue shortfall could be cleared by December through super tax recoveries.
The FBR failed to meet tax targets between July and December which had increased IMF pressure to clear pending super tax liabilities. The super tax is levied at rates ranging from 1 percent to 10 percent. Companies earning annual profits between Rs150 million and Rs200 million are charged 1 percent, profits up to Rs250 million face 1.5 percent, Rs300 million at 2.5 percent, Rs350 million at 3.5 percent, Rs400 million at 5.5 percent, Rs500 million at 7.5 percent, while profits exceeding this threshold are taxed at 10 percent. The tax applies to large companies, banks, and highly profitable sectors under Sections 4B and 4C of the Income Tax Ordinance.
The FBR documents reveal that against a July to December tax target of Rs6,490 billion the board recorded a revenue shortfall of approximately Rs335 billion. From July to November alone the shortfall exceeded Rs310 billion while December added another Rs25 billion. Total collections during the first half of the fiscal year stood at Rs6,155 billion.
The super tax is imposed on individuals and businesses earning above a government defined threshold, particularly targeting high income individuals, large corporations, banks, and profitable sectors to generate additional revenue and support national expenditures.
Under proposed reforms to the super tax structure, the rate for the manufacturing sector will be gradually reduced to 5 percent over four years and the tax will be abolished in the fifth year subject to achieving a primary budget surplus.
Approval of these proposals from the IMF is pending. Minimum profit threshold for manufacturing companies is proposed to be increased from Rs200 million to Rs500 million while the threshold for imposing 10 percent Super Tax may be raised from Rs500 million to Rs1.5 billion. Super Tax rates are also proposed to be halved over the next four years.
Sources said the prime minister has directed the FBR to accelerate enforcement measures and confirmed that no mini budget will be introduced before the next budget. Prime Minister has also instructed the economic team to prepare relief proposals for salaried individuals and industries in the upcoming budget. The Ministry of Finance has issued guidelines to the FBR on budget strategy, emphasizing revenue enhancement rather than imposing new taxes to address fiscal gaps.
