Super tax: APTMA urges FBR to work out details of imputable income

ISLAMABAD: The All Pakistan Textile Mills Association (Aptma) has urged the Federal Board of Revenue (FBR) to hold consultations with the association and other stakeholders to work out details regarding imputable income for providing generic clarification on the application of Super Tax under Section 4C for exporters.

In a letter addressed to FBR Chairman Rashid Mahmood Langrial, Aptma Chairman Kamran Arshad stated that member mills are continuously reporting that field formations of the FBR are insisting on lump-sum payment of the entire Super Tax liability.

While the industry fully respects the court’s decision, he said the current financial position of the textile sector does not allow mills to discharge the entire liability at once.

READ MORE: APTMA urges FBR to adjust super tax against pending refunds

He further pointed out that different tax offices are adopting varying approaches regarding recovery of Super Tax, which is creating uncertainty and operational difficulties for exporters.

APTMA proposed that the FBR adopt a mechanism to facilitate the industry in settling the liability.

First, the association suggested that Super Tax liabilities be allowed to be adjusted against all verified and pending refunds of income tax and sales tax, without restricting such adjustments to refunds pertaining to a single tax year.

Second, where any liability remains payable after such adjustments, taxpayers should be allowed to pay the balance through reasonable instalments. In this regard, APTMA referred to the precedent set in the Gas Infrastructure Development Cess (GIDC) case, where the Supreme Court allowed the industry to discharge its liability in 24 monthly instalments.

Third, while calculating Super Tax liability, advance tax payments for the relevant year as well as taxes already assessed and paid should be adjusted against the liability. After such adjustments, only the net payable amount should be recovered through instalments to avoid duplication of payments.

Fourth, in the case of exporters operating under the Final Tax Regime (FTR), the computation of Super Tax under Section 4C should be based on imputable income, as exporters remained subject to the FTR up to Tax Year 2024.

According to Aptma, imputable income for the purpose of Section 4C should be determined through reverse calculation of income corresponding to the tax already paid under the FTR in order to arrive at an equivalent tax liability under the Normal Tax Regime.

The Association requested the FBR to hold consultations with Aptma and other stakeholders to work out the details of imputable income and provide generic clarification on the application of Super Tax under Section 4C for exporters.

Aptma maintained that the export-oriented textile sector continues to face serious liquidity constraints and urged the FBR to issue necessary instructions to its field formations at the earliest, with intimation to the association.

Copyright Business Recorder, 2026