Supreme Court Orders Big Companies to Pay 4% Super Tax

The Supreme Court of Pakistan has ordered all large corporations to deposit a four percent super tax. A three-judge bench of the Supreme Court, led by Chief Justice Umer Ata Bandial, heard the Federal Board of Revenue’s (FBR) appeals against the Lahore High Court’s (LHC) interim order on the super tax on Thursday. The government imposed a super tax on companies earning more than Rs. 150 million last year. Cement, steel, sugar, oil and gas, fertilizers, textiles, automobiles, tobacco, and other industries were among them. In a hearing held on February 6, the Supreme Court while amending the interim order of the LHC allowed the FBR to recover the 50 percent super tax imposed on large companies earning more than Rs. 150 million within a week. Before the LHC order, taxpayers challenged the levying of the super tax with retroactive effect for tax years 2022 and onward. The LHC stayed in the recovery proceedings and directed the FBR to allow various industries to file their returns, excluding super tax, subject to the deposit of post-dated cheques for the difference. Pertinently, FBR had filed appeals in the Supreme Court against the LHC order dated September 29, 2022. The government had earlier imposed a super tax on high-earners through the Finance Act 2022 by inserting a new section 4C in the income tax ordinance, which states that “a super tax shall be imposed for the tax year 2022 and onwards at the rates specified in Division IIB of Part I of the First Schedule, on the income of every person.”. This allowed the FBR at the time to impose a 10 percent super tax on 13 industries earning more than Rs. 150 million through 4C beginning in the fiscal year 2022.