By Commerce Reporter
LAHORE: Lahore Chamber of Commerce and Industry (LCCI) Senior Vice President Tanveer A. Sheikh has welcomed the Federal Board of Revenue’s decision to abolish super tax for qualifying exporters earning more than Rs500 million, describing the measure as a positive step towards reducing the tax burden on Pakistan’s export sector and improving its competitiveness in international markets.
Reacting to the Income Tax Explanatory Circular No. 2 of 2026, Sheikh said exporters had been facing considerable pressure from high energy costs, expensive financing, taxation and increasing competition in global markets, and the latest relief could provide much-needed fiscal space to export-oriented businesses.
Under the amendment explained by the FBR, super tax has been abolished for exporters deriving income exceeding Rs500 million where export proceeds realised during the tax year represent more than 80% of their total turnover for that year.
“This is an encouraging decision for the export sector and sends a positive signal to businesses that have been consistently demanding a competitive and predictable taxation regime,” Sheikh said. “Reducing the tax burden on genuine exporters can help them reinvest in capacity expansion, technology, product development and exploration of new international markets.”
He said Pakistan needed sustained export growth to strengthen its external account, generate foreign exchange and create employment. Policies that allow exporters to retain more resources for reinvestment could therefore produce benefits beyond individual businesses and support wider economic activity.
The LCCI senior vice president said the government should build on the measure by developing a broader long-term strategy aimed at making Pakistani exports competitive rather than relying on frequent changes in taxation and regulatory policies.
According to the FBR circular, the super tax rate has also been reduced from 10% to 8% for persons whose income exceeds Rs500 million, other than specified categories.
Sheikh welcomed the broader reduction as well, saying excessive taxation of documented businesses could discourage investment and expansion. He stressed that Pakistan needed to broaden the tax base while avoiding disproportionate pressure on existing taxpayers.
“The documented sector should be encouraged to grow. When businesses expand, invest and become more profitable, the economy ultimately benefits through greater employment, production and sustainable tax revenues,” he said.
Sheikh, however, called for simple and transparent implementation of the export-related exemption so eligible businesses could receive the benefit without unnecessary procedural hurdles or prolonged disputes with tax authorities.
He said clarity regarding the calculation of the 80% export-turnover threshold and efficient verification of export proceeds would be important to ensure that the relief achieved its intended objective.
Commenting on other changes explained in the circular, Sheikh said provisions allowing re-audit of accounts in specified circumstances should be implemented with appropriate safeguards and should not result in unnecessary duplication of audits or harassment of compliant taxpayers.
The FBR has stated that the commissioner may, subject to prescribed conditions, an opportunity of hearing and prior approval of the chief commissioner, direct accounts to be re-audited by an accountant, inventory to be re-valued by a cost accountant or actuarial values to be determined by an actuary from a panel nominated by the Board.
Sheikh said businesses recognised the need for effective tax administration and enforcement but transparency, due process and taxpayer facilitation should remain central to the system.
He urged the government and FBR to continue consultations with chambers of commerce and industry on taxation reforms, particularly those affecting exporters, manufacturers and small and medium enterprises.
“Pakistan needs policies that reward exports, investment, documentation and employment generation,” Sheikh said. “The super tax relief for qualifying exporters is a welcome move, and similar business-friendly reforms can help restore confidence and put the economy on a stronger growth path.”
The relief could improve cash flows for qualifying export-oriented businesses and provide additional resources for investment, modernisation and market expansion. Its actual impact, however, will depend on implementation and exporters’ ability to satisfy the prescribed conditions.
LCCI expects the government to follow the measure with broader reforms aimed at lowering the cost of doing business, improving tax predictability and strengthening Pakistan’s export competitiveness.
