SC deliberates over insufficient govt data in Super Tax case hearing

ISLAMABAD: A five-member Constitutional Bench of the Supreme Court, headed by Justice Aminuddin Khan, resumed hearing on petitions challenging the imposition of the super tax on high-income companies.

During today’s proceedings, senior legal counsels Imtiaz Rashid Siddiqui and Shahzad Atta Elahi presented their arguments on behalf of the petitioner companies. The hearing revolved around constitutional concerns and procedural irregularities surrounding the imposition of the super tax, introduced by the federal government in 2022.

Also read: Constitutional Bench debates legality of super tax on provident funds

Imtiaz Rashid Siddiqui questioned the legality of the super tax, stating, “In a country like Pakistan, the imposition of super tax is questionable and should be reviewed.” He said that the Constitution of Pakistan provides relief to taxpayers and referenced prior decisions by the Lahore High Court (LHC), where both single and division benches had granted relief in similar cases.

“The Constitution exists, and the Constitution gives me relief,” Siddiqui argued, adding that the retrospective application of the tax – making taxpayers liable from July 1, 2022 – is unjustified. “I am being made to pay again the tax I already paid last year,” he said.

Justice Muhammad Ali Mazhar noted that numerous cases pertaining to the super tax for the year 2023 have also been filed in the Islamabad High Court (IHC) from various provinces, including Sindh, highlighting the widespread legal concern over the tax’s implementation.

Shahzad Atta Elahi focused on the timeline and expansion of the tax. He noted that initially, on June 10, 2022, only banks were included under the super tax scheme. “There was only a bill for the banks at that time,” he said. However, by June 24, 2022, the scope had expanded significantly.

“In his budget speech, the then Federal Finance Minister announced that 13 more industries had been identified and a 10 per cent super tax would be imposed on income exceeding Rs300 million,” Elahi told the court. He also questioned the credibility and completeness of the data being used by the Federal Board of Revenue (FBR), adding that only 20 per cent of relevant company data is available, while organisations like APTMA have lists of up to 500 companies.

Also read: Super tax case: Constitutional Bench deliberates on contradictory IHC verdict

Elahi said that many of the companies voluntarily publish financial data every quarter, yet the government’s record remains incomplete. Justice Jamal Khan Mandokhail, during the hearing, remarked, “I feel sorry for the then Federal Minister,” in reference to the inconsistent rollout of the tax policy.

The hearing was adjourned until 11:30 AM tomorrow, with Shahzad Atta Elahi expected to continue his arguments.