In a decisive policy shift aimed at bolstering the country’s export sector, Finance Minister Muhammad Aurangzeb announced on Friday that the government will completely abolish the super tax imposed on exporters. The move comes directly on the heels of a firm directive from Prime Minister Shehbaz Sharif and the federal cabinet.
“I have received directives from PM Shehbaz and the federal cabinet to abolish super tax completely on exporters I will work on that along with my team,” Aurangzeb stated during an appearance on Geo News programme ‘Aaj Shahzeb Khanzada Kay Saath’. He stressed the binding nature of the order, adding, “Since it is the prime minister’s directive, we will go through with that.”
Phased Relief Already Underway
The finance czar detailed that the government has already taken significant steps to ease the tax burden. The super tax has been eliminated for exporters with annual earnings below Rs500 million. For businesses whose income exceeds this threshold, the rate has been slashed from 10% to 8%. The new announcement signals the final phase of this relief, removing the levy entirely across the board.
Budget Buffers Against Middle East Instability
The announcement was made just hours after Aurangzeb presented the federal budget for the fiscal year 2026-27, which outlines a total outlay of Rs18,771 billion. The finance minister cautioned that while the domestic economy has stabilised, the ongoing conflict in the Middle East necessitates fiscal prudence.
“As a finance minister, I have to make sure we keep some room and buffer in the budget, because the energy infrastructure has been hit,” he explained. He warned that the economic repercussions of the regional instability are expected to persist into the next year, even as he expressed optimism that Pakistan’s diplomatic efforts could help facilitate a lasting deal between the United States and Iran.
FY2026-27 Budget at a Glance
Breaking down the newly unveiled budget, Aurangzeb highlighted that the largest single allocation, a staggering Rs8.054 trillion, has been earmarked for mark-up payments. Defence spending follows with an allocation of Rs3 trillion, while the federal development programme has been assigned Rs1 trillion.
The government’s fiscal plan projects an economic growth rate of 4% and an average inflation rate of 8.2% for the upcoming fiscal year. In a parallel move to provide citizen relief, the budget also proposes income tax reductions for salaried individuals across four tax slabs and the complete abolition of the surcharge on the salaried class. The Finance Bill aims to restructure tax slabs by introducing additional intermediate brackets to ease the burden on working professionals.
