Govt Likely to Reduce Super Tax for Manufacturing Sector Amid IMF Approval

The government is likely to lower the super tax rate for the manufacturing sector as part of its upcoming industrial policy, with plans to gradually reduce the rate to 5% over the next four years, subject to IMF approval, sources told ProPakistani. According to sources, the super tax will be completely abolished in the fifth year, provided the primary balance remains in surplus. The draft of the new industrial policy, which is expected to be approved by the federal cabinet later this month, includes several key measures aimed at boosting the manufacturing sector. Among these is a proposal to increase the minimum threshold for the super tax from Rs. 200 million to Rs. 500 million. The policy draft suggests raising the threshold for imposing a 10% super tax from Rs. 500 million to Rs. 1.5 billion. This move is intended to provide relief to smaller manufacturers while ensuring that only larger entities bear the burden of the super tax. The policy also outlines measures to revive struggling industrial units and rationalize tax rates for the manufacturing sector. A bankruptcy framework will be introduced to facilitate the restructuring of failing businesses, while credit facilities will be made available on easier terms to support manufacturers. To attract investment and boost exports, the policy includes provisions for protecting investments and enhancing the competitiveness of the manufacturing sector in international markets. These steps are expected to create a more favorable environment for industrial growth and economic development. The new industrial policy, which aims to address long-standing challenges in the manufacturing sector, is set to be presented to the federal cabinet for approval within the current month, subject to IMF approval.