Pakistan ‘is not going bankrupt’: CJP

ISLAMABAD:

Chief Justice of Pakistan Umar Ata Bandial on Friday rejected the notion that the country was teetering on the verge of “bankruptcy” and called upon the government to make concerted efforts aimed at stopping the outflow of foreign currency through smuggling.

The chief justice’s remarks came as he headed a three-member bench comprising Justice Ayesha A Malik and Justice Athar Minallah hearing the Federal Board of Revenue’s (FBR) petition challenging the Lahore High Court’s order regarding the collection of ‘super tax’ from large-scale industries.

The FBR has projected Rs250 billion from the imposition of the super tax in FY23. However, taxpayers challenged the tax with retrospective effect for tax year 2022 and onward in the LHC.

The court stayed the recovery proceeding and directed the FBR to allow different industries to file their returns excluding the super tax subject to the deposit of post-dated cheques of the differential amount.

However, the FBR challenged the LHC order of Sept 29, 2022 in the Supreme Court.

During Friday’s proceedings, the Supreme Court consolidated all identical petitions challenging the super tax and fixed them for hearing next week.

Counsel for the FBR Faisal Siddiqui said that the LHC had suspended the implementation of its final decision in the case for 60 days. “There are traditions in tax cases where the court orders companies to pay 50 per cent of the tax,” he added.

Barrister Farogh Naseem, counsel for the industries, said that all petitions of the FBR against the LHC's interim order had become ineffective after the final decision of the Lahore High Court.

The court could not order the payment of 50 per cent super tax after the petitions become ineffective, he added.

The chief justice remarked that the FBR imposed the super tax in good faith and added that it was also known that Shell Pakistan, one of the petitioners, paid taxes in millions of rupees.

Advocate Siddiqui said that he was representing the FBR, adding that he would also represent the federal government if the country went into default.

At this, the chief justice said that the country was not going bankrupt. “Everyone needs to improve themselves for the sake of the country,” he added.

He noted that $4 million were being smuggled out of Pakistan illegally every day.

"All we need is to get organised and take action," he added.

He added that the situation could improve if the government took steps to stop the smuggling of foreign currency abroad.

Later, the hearing of the case was adjourned till February 16.

Through the Finance Act 2022, the government had imposed a super tax on high-earning persons by inserting a new Section 4C in the Income Tax Ordinance.

Through the section, the FBR imposed a 10 per cent super tax on 13 sectors earning more than Rs150 million in the tax year 2022.

The sectors are steel, banking, cement, cigarettes, chemicals, beverages, and liquefied natural gas terminals, airlines, textile, automobile, sugar mills, oil and gas, and fertiliser.

Since then the decision has been challenged in almost all high courts of the country on various grounds.