CJP Umar Ata Bandial rejects the notion that the country was headed towards bankruptcy
ISLAMABAD, Feb 10 (SABAH): Chief Justice of Pakistan (CJP) Justice Umar Ata Bandial on Friday rejected the notion that the country was headed towards bankruptcy and asked the government to adopt measures to stem foreign currency smuggling.
A three-member bench headed by Chief Justice Umar Ata Bandial resumed a hearing into the Federal Board of Revenue’s (FBR) challenge to the Lahore High Court’s bar on the taxman from moving to collect a “super tax” from industries.
In June last year, the government launched plans to impose a one-time 10 per cent tax on large-scale industries’ profits to ease the impact of the rising inflation on the poor. The FBR projected Rs250bn from the imposition of the super tax in FY23.
Through the Finance Act 2022, the government imposed a super tax on high-earners by inserting a new section — 4C — in the income tax ordinance. Through the section, FBR imposed a 10pc super tax on 13 sectors earning more than Rs150 million from tax year 2022.
Several companies subsequently approached the Lahore High Court (LHC) challenging the super tax, following which the LHC placed a moratorium on the FBR from collecting it. In response, the FBR appealed against the LHC’s order in the SC.
In the last hearing on Feb 6, the apex court modified the LHC’s interim order and directed wealthy taxpayers to deposit half of their super tax dues directly with the FBR within one week.
On Friday, the top court sought to club all pleas related to the super tax so they could be heard together.
At the start of the hearing, FBR counsel Faisal Siddiqui told the court that the LHC had suspended the implementation of its final decision into the case for 60 days.
Barrister Farogh Naseem, representing the companies, argued that all petitions of the FBR against the LHC’s interim order had become ineffective, especially after the announcement of the provincial court’s final decision.
The chief justice said the case could be fixed for a hearing next week. He remarked that the FBR imposed the super tax in “good faith”.
CJP Bandial said it was also known that Shell Pakistan, one of the petitioners, paid taxes in the millions of rupees.
“Right now I am representing the FBR,” Siddiqui responded. He said he would also represent the federal government if the country defaulted.
The chief justice interrupted him, saying the country was “not going bankrupt”. “Everyone needs to improve themselves in the better interest of the country,” he added.
Chief Justice remarked that economic situation of the country would improve if government takes steps to curb smuggling of foreign currency.
CJP Bandial highlighted that “$40 million” were smuggled from Pakistan on daily basis, saying: “We need to take organised measures against the menace”. He said everyone should improve itself in larger interest of the country. He also said Pakistan was not on the path of bankruptcy.
During the hearing, the FBR lawyer Faisal Siddiqui said the LHC had issued the final verdict, suspending collection of supertax from companies for 60 days.
Barrister Farogh Naseem said the FBR case had become ineffective after the LHC verdict and that the apex court could not issue an order for collection of 50 per cent super tax.
The CJP remarked that the tax collection body had approached the top court with good intentions. He adjourned the case till February 16 and decided to club all cases related to the supertax.
Earlier this week, the apex court modified an interim order of the LHC and directed wealthy taxpayers to pay their 50 per cent due super tax to the FBR within one week.