ISLAMABAD: PML-N leader and former minister for privatisation Daniyal Aziz has moved the apex court against the Tax Laws (Amendment) Ordinance 2020 that was promulgated on April 18.
According to the petition, the ordinance has been introduced to whiten the black money and aims only at benefiting the powerful elite. It claims that the ordinance is against national and international agreements and should be declared null and void.
The petitioner has nominated the Federal Ministry of Finance, the Cabinet Division and the Federal Board of Revenue (FBR) as respondents and requested the court to first suspend the ordinance until the court decides this petition.
The Tax Laws (Amendment) Ordinance, 2020 follows through on the special incentive package announced by the Prime Minister Imran Khan in early April for revival of the construction sector in an attempt to bolster the economy hit hard by the coronavirus pandemic.
To align with this announcement, the amendment ordinance grants status of ‘industry’ to construction sector through suitable amendment in the Income Tax Ordinance, 2001 [the 2001 Ordinance] and offers several time bound tax reliefs to builders and developers who complete their projects by Sep 2022.
Many of these concessions are optional. Those who decide not to opt for the tax rates offered by the newly promulgated Eleventh Schedule may continue to be taxed under normal tax regime.
The amendment ordinance also grants immunity from probe regarding source of investment, subject to fulfillment of certain conditions, though it is noted that immunity is restricted to the provisions of the 2001 Ordinance and does not cover the Benami Transactions (Prohibition) Act, 2017.
The ordinance is also silent on any exemptions from sales tax or excise duty on construction material, though this was also part of the package announced by the premier. There is also no relief from capital gains tax on commercial property or open plots despite announcement to the contrary.