FBR abolishes Super Tax for qualifying exporters earning over Rs500 million

The Federal Board of Revenue (FBR) has abolished Super Tax for exporters with income exceeding Rs500 million, subject to specific eligibility conditions.

 

According to Income Tax Explanatory Circular No. 2 of 2026, issued by the FBR on Tuesday, the measure provides complete relief from Super Tax to exporters whose realised export proceeds account for more than 80% of their total turnover during the relevant tax year.

 

The FBR explained that Super Tax has generally been abolished for persons with income of up to Rs500 million, except for categories specifically listed under the relevant provisions.

 

For exporters earning more than Rs500 million, a new Clause 104B in Part IV of the Second Schedule provides complete exemption from Super Tax where export proceeds realised during the tax year exceed 80% of total turnover.

 

Separately, the rate of Super Tax has been reduced from 10% to 8% for persons whose income exceeds Rs500 million, other than those falling within the specified exempt categories.

 

The FBR has also introduced changes to the tax audit framework. Under a new sub-section (68) of Section 177, the Commissioner may, subject to the taxpayer being given a reasonable opportunity to be heard and obtaining prior approval from the Chief Commissioner, order a specialised re-examination of accounts.

 

Depending on the nature and complexity of a taxpayer’s business, the volume of accounts and transactions, concerns regarding their accuracy or other specialised circumstances, the Commissioner may direct that accounts be re-audited by an accountant, inventory be revalued by a cost accountant, or actuarial values be determined by an actuary.

 

Such professionals will be selected from a panel nominated by the FBR. The amended law also provides a mechanism allowing registered persons to object to the appointment of a particular accountant or cost accountant.

 

The FBR has further increased the surcharge payable by persons who are not included on the Active Taxpayers’ List.

 

However, a new provision allows an individual to avoid the surcharge requirement by submitting an undertaking to the Commissioner that they will not purchase, acquire or otherwise obtain ownership or beneficial interest in any property for six months from the date of submitting the undertaking.

 

The latest amendments form part of the FBR’s broader changes to Pakistan’s income tax framework for 2026.