Levy aims at high-earning individuals, industries, big corporations
\n Islamabad
\nThe Supreme Court questioned the Federal Board of Revenue\u2019s (FBR) handling of the super tax case, with Justice Muhammad Ali Mazhar observing that \u201cthe entire burden comes down on the common man\u201d.
\nA five-member constitutional bench, headed by Justice Aminuddin Khan, took up petitions challenging the imposition of super tax by the Pakistan Muslim League-Nawaz (PML-N) government in 2015 to raise funds for people displaced by Operation Zarb-e-Azb.
\nHearing FBR counsel Asma Hamid\u2019s arguments on Friday, the court qestioned the impact of the levy on ordinary citizens.
\nHamid apprised the bench that two paragraphs in the Islamabad High Court\u2019s (IHC) decision contradicted each other\u2013one stated no tax would be levied and the other allowed it.
\nJustice Hasan Azhar Rizvi remarked that the super tax was causing companies loss and questioned policies affecting senior citizens.
\nThe bench also examined deductions from provident funds. Justice Mazhar asked if the funds reached widows, while Justice Rizvi questioned whether companies could transfer amounts to other accounts if widows were the net beneficiaries.
\nTo this, Hamid replied she could guide the court on legal points but did not have knowledge of financial losses or benefits.
\nJustice Mazhar remarked that the proceedings were turning into an \u201cI\u2019m being attacked\u201d issue, and highlighted procedural complications.
\nAt this, Hamid contended that Sections 4C and 9 of the Income Tax Ordinance, 2001, should be read together, with Section 4C remaining a complete section.
\nSection 4C of the Ordinance breaks down \u201cincome\u201d as the sum of profit on debt, dividend, capital gains, brokerage and commission whereas taxable income as defined by Section 9 refers to the \u201ctotal income…of the person for the year reduced (but not below zero) by the total of any deductible allowances…for the year\u201d.
\nFBR member Dr Ishtiaq interjection to add that the matter at hand pertained to income, not individual taxpayers.
\nJustice Jamal Khan Mandokhail sought clarity on the basis of the petitions and questioned whether objections were formally raised or sprung on after a show-cause notice.
\nHamid replied in the affirmative to the latter and added that she was representing the FBR in 20 other cases pending before the court.
\nThe bench inquired about the tax rate besides seeking to understand why Sections 4C and 9 read together would not override the definition of income or grant exemptions.
\nHamid maintained that amendments to the law after the 1979 ordinance had already fixed the tax rate.
\nSuper Tax
\nThe super tax is an additional levy on high-earning individuals, companies, and industries, largely aimed at big corporations. In the 2022\u201323 federal budget, the government imposed up to 10% super tax on major sectors, including cement, steel, sugar, oil and gas, fertiliser, banks, and textiles, citing the need to raise extra revenue for economic stabilisation.
\nPetitions challenging the levy have been filed before the top court by individuals and organisations. At the previous hearing the bench was apprised by the FBR that no one had challenged the Lahore High Court\u2019s (LHC) verdict, upholding the legality of the super tax imposed under Section 4C of the Income Tax Ordinance, 2001, while reducing its rate from 10% to 4% for 16 sectors, including banking, and offering partial relief to petitioners.
\nEarlier this year, the apex court questioned whether the Centre could distribute super tax revenue to provinces, noting that while the levy has been extended since 2016, no funds had been utilised for the stated purpose.
\nAt a recent hearing, the bench raised concerns over the impact of the super tax on ordinary citizens, Justice Mazhar observing that whether it was a cement bag or a liquefied natural gas shipment, \u201cthe entire burden comes down on the common man\u201d.
\n\u201cBusiness will flourish, if we make things easier for people,\u201d he added.
\n\u201cDo not discourage taxpayers \u2014 when you do, people end up leaving the country,\u201d Justice Mandokhail had cautioned, similarly.
\nHamid had then clarified that only 15 sectors with incomes exceeding Rs300 million were liable for the super tax and that no company had claimed an inability to pay. The bench pressed the FBR to explain why distinctions among taxpayers were created, stressing that budget measures should not shift the burden back onto the public.<\/p>\n","protected":false},"excerpt":{"rendered":"
Levy aims at high-earning individuals, industries, big corporations Islamabad The Supreme Court questioned the Federal Board of Revenue\u2019s (FBR) handling of the super tax case, with Justice Muhammad Ali Mazhar observing that \u201cthe entire burden comes down on the common man\u201d. A five-member constitutional bench, headed by Justice Aminuddin Khan, took up petitions challenging the […]<\/p>\n","protected":false},"author":2,"featured_media":454450,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":{"0":"post-502500","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-national"},"yoast_head":"\n