The Supreme Court imposed a 4% super tax on Thursday for the major manufacturing sectors.
Federal government and the Federal Board of Revenue (FBR) arguments over the collection of super tax were heard by a three-member bench consisting of Chief Justice Umar Ata Bandial, Justice Ayesha A. Malik, and Justice Athar Minallah.
The super tax imposed in budget 2022–23 with retrospective effect was challenged by a number of businesses, and the Sindh High Court banned the collection of the 10% super tax from the previous fiscal year.
Last year, Prime Minister Shehbaz Sharif announced a 10pc tax on major industries including:
- Cement
- Steel
- Sugar
- Oil and gas
- Fertilizers
- LNG terminals
- Textiles
- Banking
- Automobiles
- Chemicals
- Beverages
- Cigarettes
The government added a new section C-4 to the Income Tax Law through the Budget Act 2022 in order to levy a super tax on high-income individuals. With retrospective effect beginning on July 1, 2021, the FBR imposed a 10 percent super tax under this clause on 13 sectors earning more than Rs150 million.
Since then, the decision has been contested on a variety of grounds in practically all of the country’s high courts. Similarly to this, more than 100 petitions contesting the validity of the Finance Act 2022’s provisions were submitted to the Sindh High Court. According to the petitions, the Budget Act 2022 of the federal government included a tax on previous transactions.
The Sindh High Court ruled on December 22, 2022, that the tax implementation from the prior fiscal year was invalid and that the tax would begin to apply from the current fiscal year.
The Federal Board of Revenue (FBR) and the federal government, however, appealed the decision to the Supreme Court. The Supreme Court ordered that all parties pay a 4 percent super tax in its decision in the above-mentioned appeals.
Earlier on February 6, the Supreme Court altered the Lahore High Court’s temporary injunction and ordered higher-income taxpayers to send 50% of their super tax directly to the FBR within a week.
