Income Tax Ordinance 2011: Govt to justify flood surcharge in apex court
SC issues notice to law ministry while observing taxes may be returned if found to be unjustified.
ISLAMABAD:
The Supreme Court issued notices to the government this week, for a second time, on a petition filed against the Income Tax (Amendment) Ordinance, 2011.
The ordinance known as the ‘flood surcharge’ was issued by President Asif Ali Zardari on March 15, 2011. The petition stated that the surcharge, which targets income tax, is a tax imposed by one person, namely President Zardari – and no single citizen is empowered to tax the people of Pakistan.
Petitioner Shahid Orakzai, a freelance journalist, said the 15% surcharge on income tax for all taxpayers in Pakistan was illegal and unjustified.
The petition stated that parliament is the sole authority to impose such taxes. It added that the president has no power with regard to a money bill under Article 75 of the Constitution, and cannot return such a bill to parliament for reconsideration.
Included amongst the respondents who were issued notices was Attorney General of Pakistan Irfan Qadir, who was asked to appear before the court on November 8, and the law ministry.
Orakzai held that no one was present in the court to defend the ordinance earlier. Chief Justice Iftikhar Muhammad Chaudhry, heading a two-judge bench, observed that the court was repeating the notices in this case because there was a possibility that taxes may be returned if found unjustified.
The chief justice added that since the interpretation of an important provision of the Constitution was required for the case, it was necessary to be informed of the government’s version in this regard.
The petition filed by Orakzai argued that the ordinance does not explain the circumstances which rendered it necessary. It does not provide any grounds for the imposition of the surcharge, nor does it give any title to justify the same in public, the petition adds. Media reports called it the ‘flood surcharge’ but the ordinance makes no such reference to any rehabilitation activity, the petition stated.
The petition stated that whereas the minimum life of an ordinance is 120 days, an impugned (challenged) ordinance is effective for 106 days, and hence it can lapse without being converted into an act of parliament.
Furthermore, the petition added, whereas all ordinances to be laid before the National Assembly under Article 89 can be further extended for another 120 days, the National Assembly has no constitutional power to extend impugned ordinances.
The flood surcharge experienced its fair share of controversy in September 2011, when big businesses had refused to deposit the tax exploiting a legal lacuna left open by the tax machinery.
Published in The Express Tribune, November 4th, 2012.
The Supreme Court issued notices to the government this week, for a second time, on a petition filed against the Income Tax (Amendment) Ordinance, 2011.
The ordinance known as the ‘flood surcharge’ was issued by President Asif Ali Zardari on March 15, 2011. The petition stated that the surcharge, which targets income tax, is a tax imposed by one person, namely President Zardari – and no single citizen is empowered to tax the people of Pakistan.
Petitioner Shahid Orakzai, a freelance journalist, said the 15% surcharge on income tax for all taxpayers in Pakistan was illegal and unjustified.
The petition stated that parliament is the sole authority to impose such taxes. It added that the president has no power with regard to a money bill under Article 75 of the Constitution, and cannot return such a bill to parliament for reconsideration.
Included amongst the respondents who were issued notices was Attorney General of Pakistan Irfan Qadir, who was asked to appear before the court on November 8, and the law ministry.
Orakzai held that no one was present in the court to defend the ordinance earlier. Chief Justice Iftikhar Muhammad Chaudhry, heading a two-judge bench, observed that the court was repeating the notices in this case because there was a possibility that taxes may be returned if found unjustified.
The chief justice added that since the interpretation of an important provision of the Constitution was required for the case, it was necessary to be informed of the government’s version in this regard.
The petition filed by Orakzai argued that the ordinance does not explain the circumstances which rendered it necessary. It does not provide any grounds for the imposition of the surcharge, nor does it give any title to justify the same in public, the petition adds. Media reports called it the ‘flood surcharge’ but the ordinance makes no such reference to any rehabilitation activity, the petition stated.
The petition stated that whereas the minimum life of an ordinance is 120 days, an impugned (challenged) ordinance is effective for 106 days, and hence it can lapse without being converted into an act of parliament.
Furthermore, the petition added, whereas all ordinances to be laid before the National Assembly under Article 89 can be further extended for another 120 days, the National Assembly has no constitutional power to extend impugned ordinances.
The flood surcharge experienced its fair share of controversy in September 2011, when big businesses had refused to deposit the tax exploiting a legal lacuna left open by the tax machinery.
Published in The Express Tribune, November 4th, 2012.