Corporate sector says additional levies on profitable companies are discouraging investment and growth, urges government to focus on expanding taxpayer base instead.
Prominent business leaders in Pakistan have intensified calls for the immediate removal of the controversial “super tax” imposed on large companies and high-income individuals, arguing that the measure is stifling economic activity and deterring both local and foreign investment.
The business community has proposed an alternative strategy focused on expanding the tax net to bring more sectors and individuals into the formal economy, which they say would generate sustainable revenue without overburdening existing taxpayers.
‘Super tax’ under fire:
The super tax, introduced as a temporary measure during Pakistan’s ongoing economic crisis, imposes additional levies of up to 10 percent on companies earning high profits in sectors such as banking, cement, steel, and energy. Business representatives claim the tax has negatively impacted investor confidence at a time when the country is seeking to revive growth and meet International Monetary Fund (IMF) targets.
“Continuing with the super tax is counterproductive,” said a senior business leader representing major industry associations. “It penalises success and discourages reinvestment. We need a fair and predictable tax regime that encourages expansion rather than flight of capital.”
Efforts to Widen the Tax Base:
Business groups have submitted detailed proposals to the government and the Federal Board of Revenue (FBR), calling for aggressive documentation of the economy, digitisation of tax processes, and inclusion of sectors that remain largely untaxed, such as agriculture, retail trade, and real estate.
They argue that Pakistan’s narrow tax base-where a small percentage of the population and businesses bear the bulk of the tax burden-is the root cause of chronic fiscal deficits, rather than insufficient taxation on large corporations.
Officials from the Pakistan Business Council and other chambers of commerce have emphasised that broadening the tax net, coupled with improved governance and reduced leakages, could significantly increase revenue without resorting to distortionary taxes.
Pakistan Debates Super Tax Amid Economic Pressures:
Pakistan is trying to balance IMF fiscal targets with efforts to boost private sector growth. While the government defends the super tax as necessary for revenue, businesses argue it may hurt long-term recovery.
Experts say Pakistan faces a tough choice between raising extra taxes and expanding the tax base, which requires strong political will and tackling informal sectors.
Business leaders warn that continued heavy taxation could reduce industrial output, slow job creation, and delay reforms. With high inflation, debt pressures, and weak growth, the debate over tax policy is expected to intensify.