Super tax push risks layoffs and shutdowns, Karachi chamber says

The Karachi Chamber of Commerce and Industry has warned that the government’s push to aggressively collect super tax following a recent court ruling could cripple businesses and deepen Pakistan’s economic troubles unless relief measures are introduced.

KCCI President Muhammad Rehan Hanif said authorities should allow tax adjustments or installment-based payments, cautioning that demanding large sums in a single payment would severely disrupt industrial operations.

His comments came after the Federal Constitutional Court upheld the legality of the super tax, clearing the way for its recovery. While acknowledging the verdict and the government’s need for revenue, Hanif said the timing and method of collection were critical as businesses grapple with a severe liquidity crunch.

Industries, particularly in Karachi — the country’s main commercial hub — are already under intense financial pressure due to high energy tariffs, elevated interest rates, rising input costs and multiple taxes, he said. Immediate recovery of super tax amounting to hundreds of billions of rupees would drain working capital, disrupt cash flows and make it difficult for companies to pay salaries, utility bills, import raw materials or service bank loans.

“Forcing businesses to deposit huge amounts in one installment is neither practical nor sustainable,” Hanif said. He urged the government to allow super tax liabilities to be adjusted against long-pending income and sales tax refunds, which he said have deprived exporters and manufacturers of liquidity for years.

Alternatively, he called for a clear and structured installment facility that would allow taxpayers to pay over a reasonable period without paralyzing operations. Such measures would improve compliance while protecting jobs and industrial continuity, he added.

Hanif warned that without relief, companies would be forced to scale back operations, lay off workers or shut down altogether, particularly small and medium-sized firms in export-oriented sectors such as textiles, engineering goods, pharmaceuticals and value-added manufacturing. That, he said, would reduce exports and shrink the tax base rather than expand it.

He also noted that Pakistan’s cost of doing business has surged to unsustainable levels because of high electricity and gas prices, regulatory burdens and excessive taxation. Enforcing super tax recoveries without flexibility at this stage could push otherwise viable firms into insolvency, worsening unemployment and social instability.

A weakened private sector cannot support revenue generation or economic recovery, Hanif said, urging the government to consult chambers of commerce and trade bodies before taking coercive measures.

If refund adjustments or installment options are not provided, he warned, the consequences could include widespread industrial shutdowns, loss of investor confidence and further contraction of economic activity. Sustainable revenue collection must go hand in hand with business survival, he said.