Islamabad, Pakistan – Web Desk: The Federal Constitutional Court has ruled that the imposition of the super tax is constitutional, delivering a detailed 293-page judgment on the landmark case.
Chief Justice Aminuddin Khan issued the detailed verdict, which upholds the enforcement of the super tax under Section 4C of the Income Tax Ordinance 2001.
The court ruled that the super tax should be considered independent of and separate from the regular income tax. It also set aside the Islamabad High Court’s decisions against Section 4C.
According to the detailed judgment, the tax under Section 4C will apply to tax year 2022 and subsequent years. The section applies to all incomes that fall under separate tax regimes, including capital gains.
The Federal Constitutional Court affirmed that Parliament has full authority to levy taxes on income under the Income Tax Ordinance. It stated that the Islamabad High Court’s directive to the FBR to issue a circular was beyond its jurisdiction.
The court clarified that the super tax is in addition to, not a substitute for, regular income tax. Its application to petroleum and exploration companies will be subject to specific legal limits and agreements.
Welfare and pension funds will be required to get their certificates verified for exemption from the super tax.
The judgment also stated that retrospective taxation through legislation is legally permissible. Imposing higher super tax rates on specific sectors does not constitute discrimination but falls within the legislature’s authority.
The court ruled that the super tax will only apply to income on which basic tax is chargeable. Income exempt from regular tax is also exempt from super tax.
Exemptions include income from property or share sales where tax exemption applies, inheritance income, income received after a specified period, and agricultural land sales or income.
