Super Tax Imposed as Punishment for Investors, Lawyer Argues in Supreme Court

During a Supreme Court hearing on the super tax case, lawyers argued that the tax was imposed as a form of punishment for investors. The case was heard by a five-member constitutional bench led by Justice Aminuddin, with various company representatives presenting their arguments. Advocate Farogh Naseem, representing several companies, completed his arguments, stating that the super tax was effectively a penalty for investors. During the proceedings, Justice Muhammad Ali Mazhar remarked that the super tax law clearly specifies the amount and threshold for taxation, and that each company is required to pay its respective share. He noted that the lawyer’s argument seemed to suggest that even those not liable for the tax would be forced to pay it. Farogh Naseem responded that perhaps he had not briefed his arguments clearly. Justice Jamal Mandokhail asked Naseem if he was suggesting that there should be no discrimination among taxpayers. Justice Mazhar further clarified that once tax is imposed under the final tax regime, no further tax can be levied, and that the super tax falls under a separate category. After a brief recess, the hearing resumed with arguments from Aziz Nishtar, counsel for Pakistan Tobacco Company, and Ijaz Ahmed Zahid, representing a private company. Aziz Nishtar argued that Article 18 of the Constitution grants him the right to conduct business, and by extension, obligates the state to provide a conducive business environment. He claimed that the state and its legislation had failed to do so, and described the current tax regime in Pakistan as the worst form of taxation. Justice Mazhar asked how a favorable environment could be created and whether the tax net should be expanded. Nishtar replied that he was being taxed even when not making a profit, and noted that in today’s era, even street vendors can be geo-tagged. Justice Aminuddin remarked that the government imposed the super tax out of immediate necessity, to which Nishtar responded that the tax was being used as a punishment for investors and earners. Ijaz Ahmed Zahid argued that the Finance Bill was passed without fulfilling the requirements of Article 73. He pointed out that the then-federal minister had stated a 2% tax would be imposed on Rs. 300 million. Nishtar further suggested that the Federal Board of Revenue (FBR) should focus on lowering tax rates and improving performance. Zahid added that a policy statement cannot be implemented before the budget is presented on June 10. Justice Mazhar inquired whether companies were still able to access dollars at previous rates, to which Zahid replied that if international energy prices rise, they will also increase in Pakistan. The court adjourned the hearing until tomorrow.