The Federal Board of Revenue (FBR) has set an 80% export-proceeds threshold for exporters seeking complete exemption from super tax from Tax Year 2027 under amendments introduced through the Finance Act, 2026.
The FBR, in its explanation of amendments to Section 4C of the Income Tax Ordinance, 2001, said exporters earning more than Rs. 500 million would qualify for complete super tax exemption if export proceeds realized during the tax year account for more than 80% of their total turnover.
The exemption has been introduced through Clause 104(B) of Part IV of the Second Schedule to the Income Tax Ordinance, 2001.
Super tax rates revised
Under the amended framework, a 10% super tax will apply to incomes exceeding Rs. 150 million for specific categories, including 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 any kind of fertilizer.
For other taxpayers, the super tax rate has been reduced to 8% on income exceeding Rs. 500 million.
The amendments effectively eliminate super tax for general taxpayers with income up to Rs. 500 million, while retaining the 10% rate for the specified categories.
Exporters offered full exemption
The FBR said qualifying exporters with income above Rs. 500 million could claim complete exemption from super tax provided their realized export proceeds exceed 80% of their total turnover during the relevant tax year. The measure aims to provide relief to export-oriented businesses while linking the exemption to the level of export activity.
The amended framework also reduces the general super tax rate from 10% to 8% for taxpayers earning more than Rs. 500 million. However, the reduced rate does not apply to banking companies, taxpayers covered under the relevant provisions of the Fifth Schedule and persons deriving income from fertilizer sales, who remain subject to the 10% rate.
The changes would apply from Tax Year 2027 and are part of the tax measures introduced through the Finance Act, 2026.