Federal Board of Revenue has informed the International Monetary Fund that it plans to recover more than Rs100 billion in late payment surcharges from companies. These companies had challenged the super tax in courts and delayed their tax payments.
Officials said the FBR shared this plan during ongoing discussions with the IMF. The talks focus on ensuring Pakistan meets its tax collection targets for the current fiscal year. The decision comes at a time when the government is also considering abolishing the super tax to reduce the burden on businesses.
Prime Minister Shehbaz Sharif has reportedly decided to seek IMF approval to remove the super tax. The government believes the tax places a heavy burden on profitable companies and wealthy individuals.
However, the FBR plans to collect default surcharges from companies that delayed payments while pursuing legal challenges. In some cases, the surcharge could reach up to 25 percent of the unpaid tax amount each year. The exact amount depends on the Karachi Interbank Offered Rate, which currently stands around 22 percent.
Officials estimate that surcharges from two major super tax cases could generate between Rs100 billion and Rs150 billion. These cases relate to the 2015 super tax introduced to support internally displaced persons and the 2022 super tax aimed at raising additional revenue.
Under Section 205 of the Income Tax Ordinance, the FBR has the authority to impose a late payment surcharge on unpaid taxes. The law states that taxpayers who fail to pay on time must pay a surcharge equal to either 12 percent or Kibor plus 3 percent per year, whichever is higher.
Tax officials said many companies chose to challenge the tax in court instead of paying it. During this period, firms reportedly invested the unpaid money in their businesses to generate profits.
Earlier this year, the Federal Constitutional Court upheld the legality of the super tax. The court ruled that tax rate decisions fall under Parliament’s authority.
According to FBR Chairman Rashid Langrial, the ruling secured around Rs216 billion in government revenue. After the decision, the tax authority collected nearly Rs150 billion in outstanding super tax payments.
The super tax currently generates between Rs500 billion and Rs550 billion each year. Companies in sectors such as banking, cement, and energy are expected to be most affected by the surcharge recovery.
The government has set a tax collection target of Rs14.13 trillion for the current fiscal year. However, revenue collection has already fallen below the target in the first eight months.
To ease pressure on businesses, the FBR has allowed companies to pay their outstanding tax liabilities in three installments instead of a single payment.
In other news read more about FBR Plans To ‘Seek’ Rs100bn Relief in Tax Targets During IMF Talks
Officials said additional super tax collections may also be included in the tax base for the next fiscal year. This step could help the government improve revenue projections and meet future fiscal targets.
