Supertax appeals succeed

We are pleased to share that, after proceedings spanning years in the Supreme Court of Pakistan, appeals filed by the Federal Board of Revenue against the judgment of the Sindh High Court concerning Section 4C of the Income Tax Ordinance, 2001, have been accepted.

The Sindh High Court had earlier held that Section 4C – imposing super tax on high-earning persons – would apply from tax year 2023 rather than 2022, and further declared the proviso permitting higher tax rates for certain industries to be discriminatory and ultra vires.

Both findings have been set aside, reaffirming Parliament’s competence to legislate with retrospective effect and upholding differential tax treatment where it is founded on an intelligible differentia having a rational nexus with the legislative objective.

Our founding partner, Ashtar Ausaf Ali, successfully represented the Federal Board of Revenue in this matter.