SC upholds tax payment duty in tribal regions

Top judge says all those living in Pakistan are bound to pay taxes

ISLAMABAD:

The Supreme Court on Thursday dismissed an appeal in a case related to income tax refunds within the special status of tribal areas in Khyber-Pakhtunkhwa. Chief Justice of Pakistan (CJP) Qazi Faez Isa emphasized that individuals residing in Pakistan and enjoying all its facilities were obligated to pay taxes.

A three-member bench, presided over by the Chief Justice, heard the case. During the proceedings, Riaz Hussain, the petitioner's counsel, argued that the K-P government and the customs department had issued notifications regarding tax refunds for tribal residents.

The CJP inquired whether the petitioner sought separate notifications for tribal areas in contrast to all of Pakistan's laws. Justice Athar Minallah mentioned that if the special status of tribal areas was to be maintained, a distinct notification would be necessary.

The CJP questioned the rationale behind resisting a small tax payment when the petitioner resided in Pakistan and benefited from all its amenities. He pointed out that tax revenue contributed to the construction of roads, bridges, and schools.

The petitioner's lawyer contended that income tax could not be imposed in these tribal areas, and his client sought a refund of Rs3.7 million in taxes. Justice Minallah noted that the former status of tribal areas no longer existed since they had been integrated into Khyber-Pakhtunkhwa.

Later, the Supreme Court dismissed the appeal for an income tax refund within the special status of tribal areas. Petitioner Muhammad Tahir, a resident of Mansehra, had requested a refund of income tax paid in 2011, with the Income Tax Tribunal previously ruling in his favor.

However, the Peshawar High Court suspended this decision, a ruling upheld by the Supreme Court on Thursday.