LAHORE:
Punjab Assembly Speaker Malik Muhammad Ahmad Khan has declared the government’s recent notifications revising agricultural income tax rates illegal and ordered an immediate stop to their implementation, assessment and collection.
The decision was taken in the 41st session of the Punjab Assembly on a privilege motion moved by MP Zulfiqar Ali Shah.
The Speaker held that the notifications had no legal validity as they were not presented before the Assembly in accordance with legal requirements.
He directed the Excise and Taxation Department to suspend the implementation of the revised rates and asked the government to table the relevant notifications before the House within 15 days, along with a detailed report explaining the delay.
The matter was also referred to the Law Reform and Delegated Legislation Commission to determine responsibilities and submit its findings within a month.
The issue arises from notifications issued on March 5, 2025, revising agricultural income tax rates, followed by another notification on September 10, 2025, seeking retrospective application from July 1, 2025.
The mover of the motion argued that these materials were not placed before the Assembly at the time of Budget 2025-26 as required under Section 11(2) of the Punjab Agricultural Income Tax Act, 1997. In his ruling, the President emphasized that the powers of taxation belong to the legislature under the Constitution and any delegated authority must strictly follow legal procedures.
He observed that failure to submit these notifications to the Assembly renders them ineffective and without legal basis.
The Speaker also called the omission a violation of parliamentary privilege and reiterated the importance of legislative oversight in matters of taxation.
He cited relevant judicial precedents, including superior court decisions, to support the requirement to submit tax notices to the legislature.
He further directed that all future changes in agricultural income tax rates must be placed before the Assembly during the annual budget session to be enforceable. The ruling clarifies that taxpayers affected by the now void notices may seek relief from appropriate legal forums in respect of any recovery made under the revised rates.
