Pakistan offers full super tax exemption to export-heavy businesses

The Federal Board of Revenue (FBR) has detailed an 80% export-proceeds threshold for exporters seeking complete exemption from super tax from Tax Year 2027. The change comes under amendments to Section 4C of the Income Tax Ordinance, 2001, introduced through the Finance Act, 2026.

What is the super tax rate in Pakistan now?

Super tax has been abolished for general taxpayers with income up to PKR 500 million. For income above that threshold, the rate has been reduced from 10% to 8% for most taxpayers.

However, banking companies, persons whose income is computed under Part I of the Fifth Schedule, subject to the prescribed limit, and persons deriving income from the sale of fertilizer remain subject to the 10% rate.

How can exporters qualify for a full super tax exemption?

The FBR said exporters with income exceeding PKR 500 million can claim complete exemption from super tax if their realized export proceeds account for more than 80% of total turnover during the tax year.

The exemption was introduced through Clause 104B of Part IV of the Second Schedule to the Income Tax Ordinance, 2001.

The exemption is available only where realized export proceeds exceed 80% of total turnover for the relevant tax year.

Which categories still pay a higher super tax rate?

A 10% super tax continues to apply to incomes exceeding PKR 150 million for specific categories.

These include banking companies, persons whose income is computed under Part I of the Fifth Schedule, subject to the limit prescribed under that part, and persons deriving income from the sale of any kind of fertilizer.

These categories do not benefit from the reduced 8% rate available to other taxpayers with income exceeding PKR 500 million.

When do the new super tax rules take effect?

The revised super tax framework applies from Tax Year 2027 onward.

It forms part of the broader tax measures introduced through the Finance Act, 2026, and effectively raises the super tax threshold for most taxpayers while introducing a separate exemption for export-oriented businesses meeting the 80% export-proceeds test.