ISLAMABAD: The Supreme Court on Thursday raised questions over the government’s policy regarding the imposition of Super Tax and inquired as to whether chambers of commerce and experts were consulted on the matter.
A five-member Constitutional Bench headed by Justice Aminuddin Khan heard scores of petitions challenging Sections 4B and 4C of the Income Tax Ordinance (ITO) 2001 regarding Super Tax. Other members of the bench included Justice Jamal Khan Mandokhail, Justice Muhammad Ali Mazhar, Justice Syed Hasan Azhar Rizvi and Justice Shahid Bilal Hassan.
Hundreds of petitions had challenged Sections 4B and 4C, which were inserted in the Income Tax Ordinance, 2001.
Asma Hamid, counsel for Federal Board of Revenue (FBR), continued her arguments.
Justice Rizvi asked the counsel if the FBR had consulted chambers of commerce and tax experts before the imposition of Super Tax. He further asked as to whether any papers were prepared on expert recommendations, adding that when imposing 10 percent or more tax, was any category set, such as the Rs300 million target.
“How would such a target be set and whether the finance minister had discussed it with any chamber of commerce,” the judge further inquired.
The counsel replied that policymakers in the FBR were taken into confidence when preparing the budget, adding that some chartered accountants were also on board, while consultations were also held with the finance minister.
Similarly, Justice Mazhar asked the FBR counsel about Section 12 to which the counsel responded that this was the very section being challenged in the case.
Justice Mandokhail inquired how a tax is imposed and what the procedure is.
FBR Member Dr Ishtiaq came to the rostrum and informed the court that all chambers are consulted, their suggestions are taken, and then forwarded to the Ministry of Finance.
Justice Rizvi asked whether minutes of these suggestions were prepared and whether they were submitted to Parliament. Justice Mazhar remarked whether there was any documentation of what the officer had just explained.
“What exactly was challenged in 2023,” Justice Mazhar asked to which the counsel replied that Section 2B had been challenged, and its decision was still pending before the high court.
Justice Rizvi, however, observed that no taxpayer from Sindh had gone to the Sindh High Court. The FBR counsel responded that taxpayers from Sindh had approached the Islamabad High Court instead.
She further submitted that the taxation regime under the Income Tax Ordinance is separate, adding that Section 113 pertains to minimum tax which everyone is required to pay.
Justice Mazhar noted that Section 8 concerns the final tax regime.
The FBR Member again addressed the bench, explaining that there are three categories of taxpayers: minimum, final and normal, with rates ranging from two percent to four percent depending on category.
Later, the court adjourned the hearing for today (Friday).