The Supreme Court has raised concerns over the prolonged imposition of the super tax, initially introduced for a specific purpose, questioning whether it will continue indefinitely.
During the hearing, Justice Muhammad Ali Mazhar asked if the levy, originally imposed for rehabilitation efforts following Operation Zarb-e-Azb, would persist indefinitely. A five-member constitutional bench, led by Justice Amin-ud-Din Khan, is overseeing the case, with lawyer Makhdoom Ali Khan representing the affected companies.
Khan informed the court that the super tax was introduced in 2015 as a one-time measure via the Money Bill to raise funds for displaced persons. Despite being intended as a temporary levy, it remained in place until 2022. He urged the court to demand transparency regarding the total revenue collected and how it was utilized.
Justice Jamal Khan Mandokhail inquired whether there were any records detailing the revenue generated under the tax. Khan responded that no finance minister had ever disclosed figures regarding its collection or expenditure in official statements.
Justice Mandokhail also questioned the government’s rehabilitation plans for displaced persons, including whether a formal project (PC-1) had been created and if cost estimates had been assessed. He further inquired whether imposing taxes on services through a money bill was legally permissible.
In defense of the tax, the Federal Board of Revenue’s (FBR) lawyer, Raza Rabbani, argued that counter-terrorism efforts were ongoing, with victims continuing to be displaced. However, Khan countered by asking whether terrorism had ended in 2020, as the government had ceased collecting the tax that year.
Justice Amin-ud-Din Khan raised concerns over the expenditure of funds from the national consolidated fund without provincial approval, emphasizing the need for transparency in its allocation.
The court subsequently adjourned the hearing until Wednesday, seeking further clarification from the government regarding the tax’s collection and usage.
It is noteworthy that the super tax was initially imposed by the government in 2015 on high-earning individuals, associations, and companies generating over Rs500 million annually. The tax included a 4% levy on banking sector income and a 3% rate on other sectors, aimed at financing the rehabilitation of temporarily displaced persons.
