Payment of past liabilities: Mian Zahid underscores need for FPCCI-govt parleys
KARACHI: Mian Zahid Hussain, President Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance, Chairman National Business Group Pakistan and Chairman Policy Advisory Board FPCCI, has called for an immediate dialogue between the government and the FPCCI to devise a mechanism that allows payment of past liabilities in 2 years instalments, 25 percent upfront discount, and adjustment against the pending refunds to prevent widespread defaults and industrial closures.
He said that the recent judgement by the Federal Constitutional Court upholding the imposition of Super Tax under Section 4B and Section 4C of the Income Tax Ordinance as legal which will result in approximate recovery of Rs.300 billion from the business community.
While the business community respects the supremacy of the judiciary, Mian Zahid Hussain warned the government that recovery of this high volume amount from the formal sector will severe liquidity challenges and stifle industrial growth.
Mian Zahid Hussain, stated that the abrupt recovery of Super Tax arrears, on high-earning sectors, applied from 2015 effectively raises the corporate tax burden to unsustainable levels. When combined with the standard 29% corporate tax and other levies, the effective tax rate for compliant industries now approaches or exceeds 50%.
He further stated that the tax imposed on the exporters in the past under fixed tax regime, was full and final settlement of tax liability, as such the exporters have not included the impact of super tax in their costs because the definition of tax in Income Tax Ordinance, includes super tax as well. Therefore, the exporter should not be forced to pay the past super tax.
“The formal sector is already bearing the brunt of the country’s revenue targets,” Mian Zahid Hussain said. “By upholding the Super Tax, we are penalizing the most productive sectors of the economy including textiles, pharmaceuticals, fertilizer, and banking, which are essential for job creation and exports. This decision risks draining the retained earnings that industries rely on for reinvestment, modernization, and expansion.”
The veteran business leader highlighted specific challenges this judgement creates for various industrial sectors like, Textile & Export Sectors already struggling with high energy tariffs and delayed refunds, the retrospective tax liability will wipe out liquidity needed for purchasing raw materials, further depressing export volumes, Large-Scale Manufacturing (LSM) is also affected.
The harsh recovery methods send a negative signal to both local and foreign investors regarding policy predictability in Pakistan. Pharmaceuticals & Fertilizers are also the critical sectors which face regulated pricing mechanisms; therefore, they do not have surplus profits to absorb an additional tax hit.
Copyright Business Recorder, 2026