The Supreme Court of Pakistan on Tuesday raised constitutional concerns on Tuesday whether the federal government has the power to allocate funds collected from super taxes to the provinces.
A constitutional bench of five members, led by Judge Amicin Khan, heard the case contesting the legality of the super tax and its distribution.
During the hearing, judge Jamal Khan Mandokhail wondered if the federal government was constitutionally authorized to distribute the Super tax revenues – which it amounted to Rs8 or RS8 Billion – among the provinces.
The main lawyer Makhdomo Ali Khan began his arguments, declaring that income tax, including the super tax, is collected without any specific allowance and is deposited with the national treasury.
He argued that, according to the 1973 Constitution, tax products are not intended for provincial distribution unless otherwise indicated.
He explained that the Super Tax, introduced in 2016, was initially imposed to finance the rehabilitation of displaced people.
It was extended in 2017 and opened in 2019, but no funds have yet been spent for the declared objective.
Makhdom also stressed that there is a clear difference between income tax and super tax, and that tax laws under article 113 of the income tax order also apply to minimum income.
Additional prosecutor Hafiz Ahsan said that the current procedure did not concern the distribution of funds and that no judicial order had been rendered on the issue.
Judge Aminuddin Khan asked Makhdeom how long he would need to conclude his arguments, to which the lawyer replied that he would try to conclude from here the day after tomorrow.
The court postponed the hearing until Wednesday, with Makhdom to continue to present his business.
