The government is preparing to slash the super tax for the manufacturing sector as part of its new industrial policy, aiming to reduce the rate to 5% over the next four years. The tax will be fully abolished in the fifth year if the primary balance remains in surplus and the International Monetary Fund (IMF) gives its approval.
According to reports, the draft industrial policy is expected to go before the federal cabinet later this month. It proposes raising the minimum threshold for the super tax from Rs200 million to Rs500 million, easing the burden on smaller manufacturers.
Another significant measure in the draft is the proposal to increase the threshold for the 10% super tax from Rs500 million to Rs1.5 billion. This aims to ensure that only large manufacturers bear the higher levy, while smaller units receive relief.
Support for Struggling Industries
The policy also includes steps to revive struggling industrial units, rationalize tax rates, and introduce a bankruptcy framework to restructure failing businesses. Easier credit facilities will be provided to manufacturers to help them maintain operations and expand.
To attract foreign investment and enhance exports, the policy promises investment protection and measures to improve global competitiveness. These reforms are expected to create a more favorable environment for industrial growth and economic development.
The final version of the industrial policy will be presented to the federal cabinet this month for approval, subject to IMF consent.