Super tax case: Companies counsel to resume arguments today

ISLAMABAD: The Supreme Court adjourned for today (Wednesday) the hearing into the case challenging the legality of super tax and its distribution.A five-member constitutional bench of the apex court headed by Justice Amin-ud-Din Khan heard the case.

Makhdom Ali Khan, counsel for companies, while continuing his arguments submitted that income tax is levied on income and usually does not have a specific purpose, adding that the entire tax revenue goes into national treasury.

Justice Jamal Khan Mandokhail asked the counsel whether the federal government distributed super tax funds among the provinces, the counsel replied that the tax collected in 2016 was not meant to be distributed among provinces.

The counsel submitted that according to finance minister’s speech, the super tax was to be used for the rehabilitation of homeless individuals. He further submitted that super tax was extended for one year in 2017. The counsel however, added that in 2019, ‘extension’ was replaced with ‘onwards’.

He further submitted that all tax-related principles are embedded in 1973 Constitution.Justice Mandokhail asked the counsel for the Federal Board of Revenue (FBR), Hafiz Ehsan Khokar, as to whether the amount is eight rupees or eight trillion, can it be distributed this way.

Khokar replied that this is not a matter of money distribution, adding that the court has not issued any orders regarding distribution of the amount as well.He further submitted that the only issue before the high court is the legislative competency of Parliament. Makhdom Ali Khan contended that not a single rupee has been spent so far on the rehabilitation of the homeless.

On the last hearing, Makhdom Ali Khan had informed the court that the government had introduced super levy tax in 2015, adding that the purpose of the tax was declared to be the rehabilitation of areas affected by Operation Zarb-e-Azb.He had further submitted that the government imposed super tax through the 2015 Finance Bill, and it remained in effect from 2015 to 2022. The initial estimate was to collect Rs. 80 billion, but it is unclear how much the government has collected under this tax to date.

On Tuesday, he submitted that there is a difference between income tax and super tax, adding that regardless of income level, income tax has to be paid.Makhdom Ali Khan further submitted that according to section 113 of the Income Tax Ordinance, tax applies even on minimum income.

Justice Amin-ud-Din Khan, head of the bench, asked the counsel how long he needs for concluding his arguments. Makhdom Ali Khan replied he will try to finish his arguments by day after tomorrow. Later, the court adjourned the hearing until today (Wednesday).