SC Constitutional Bench tackles Super Tax case

ISLAMABAD: A five-member Constitutional Bench of the Supreme Court is presiding over the hearing of Super Tax case. Lawyer representing companies, Makhdoom Ali Khan, is giving arguments.

Makhdoom Khan said that the government implemented the super levy tax once in the Money Bill 2015. “The purpose of tax implementation was declared to be the rehabilitation of areas affected by Operation Zarb-e-Azb. [But] super tax continued from 2015 to 2022.”

He informed the bench that the initial government estimate was to collect PKR80 billion. “It is not known how much money has been collected by the government in the form of super levy tax,” he added.

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Justice Jamal Khan Mandokhail asked, “What was the government’s plan for the rehabilitation of areas affected by the operation? Was there a PC-1 prepared for the population of the affected areas? Was there an estimate made for the rehabilitation of the affected areas?”

The justice also asked if the tax on can services be implemented through the Money Bill.

The counsel responded that the government had already collected income tax on income. “It was named super tax to avoid double taxation,” Makhdoom Khan said, adding that the the subject of social welfare has been transferred to the provinces.

“This is not a super tax but a tax,” he said.

Justice Muhammad Ali Mazhar asked, “Was the super levy tax implemented for one year?” The counsel responded in the affirmative.

Justice Mandokhail added, “Is there any calculation of how much money was collected in super tax?” The counsel answered, “The recovery and expenditure of super tax was not mentioned in any speech of the Finance Minister,” adding that the government should be asked how much tax was collected under super tax.

Justice Mazhar asked that if Super tax was imposed once, and for a specific purpose, will it continue till the end of time? The counsel reiterated that the rehabilitation of areas affected by Operation Zarb-e-Azb is a local and provincial issue.

Justice Aminuddin Khan said, “The objection is that how can money be spent without the consent of the provinces?”

To this the counsel for the Federal Board of Revenue (FBR) Raza Rabbani said, “The war against terrorism continues.” Makhdoom Khan retorted, “Did terrorism end in 2020? The government stopped collecting super tax in 2020.”

Justice Mandokhail asked about the total number of displaced persons as a result of the operation.

After hearing the arguments, the Constitutional Bench adjourned the hearing of the Super Tax case until tomorrow.