The Federal Board of Revenue (FBR) is expected to collect around 30 billion PKR in revenue following the Supreme Court’s decision regarding the super tax.
According to the FBR, the Federal Constitutional Court issued a landmark ruling after hearing cases related to Sections 4B and 4C of the Income Tax Ordinance 2001 (super tax), releasing a brief judgment that upheld the super tax. This decision is expected to generate approximately 30 billion PKR for the national treasury.
The statement added that FBR’s prominent tax lawyer, Asma Hameed, presented arguments on behalf of the board, and the court dismissed appeals filed by taxpayers under Section 4B, declaring the section constitutionally valid.
The court also approved appeals filed by the Commissioners of Inland Revenue (FBR) and the federal government regarding Section 4C of the super tax, ruling it constitutionally valid in its enforced form and retroactively applicable for the tax year 2022.
The court clarified that for the tax year 2022, the super tax rate under Section 4C will be 10 percent, applicable to the 15 sectors listed in Division IIB of the Ordinance, provided the income of the concerned taxpayers exceeds 300 million PKR in that tax year. This includes petroleum companies involved in oil and gas exploration whose operations fall under the Fifth Schedule of the Income Tax Ordinance 2001 and relevant concessionary agreements.
The court instructed the Commissioners to issue new notices and apply Section 4C according to the terms and conditions of each agreement, ensuring that the limits set in the agreements are not exceeded.
Furthermore, the court ruled that the super tax under Section 4C will also apply to banking companies for the tax year 2023 and subsequent years.
