LHC throws out pleas against super tax

In a significant development, the Lahore High Court (LHC) has set aside a number of petitions filed against imposition of a super tax in the Finance Act 2022, declaring the tax legal.

An LHC bench comprising Justice Jawwad Hassan on Tuesday unveiled its order reserved on April 12.

The Pakistan Muslim League-Nawaz (PML-N) led coalition government last year imposed the tax under Section 4C of the Income Tax Ordinance. Later, more than 350 petitioners had approached the court.

The petitioners had contended that the government could not impose the tax in retrospect. They had argued that the imposition of tax was illegal and requested the court to declare it void.

The Federal Board of Revenue (FBR) and the federal government had opposed the petitions.

Unveiling his order on Tuesday, Justice Hassan affirmed the legality of the super tax.

However, the court reduced the rate of the super tax from 10 percent to 4 percent for 16 sectors, including banking. Like the previous year, the government has announced the imposition of the super tax for the year 2023 in the Finance Bill 2023.