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Super tax is constitutionally valid, rules Federal Constitutional Court

ISLAMABAD: The Federal Constitutional Court (FCC) of Pakistan upheld the constitutionality of the super tax introduced under Sections 4B and 4C of the Income Tax Ordinance, 2001, backing the Federal Board of Revenue (FBR).

However, it excluded capital gains from the disposal of immovable property or securities held for a prescribed period, The News reported on Thursday.

The FCC passed its judgement in a case filed by DG Khan Cement Company Limited and others. This judgement vindicates the position pursued by the Federation of Pakistan and the FBR.

The FCC ruled that the super tax is an additional tax on income, drawing its legislative sanction from entry 47, Part 1 of the Federal Legislative List of the Constitution.

“The necessary corollary to the above is that if a certain class of income is exempt from tax under the law regulating it i.e. the ordinance,” the judgement read and added, “For instance, where no tax is payable on capital gains arising on disposal of immoveable property or securities either for being held beyond a certain period or is inherited or is otherwise exempted from the ordinance, no super tax shall be payable on such capital gains on disposal of immoveable property or securities”.

The FCC ruled that the same principle “shall apply” to any capital gains on disposal of agricultural property, which even otherwise cannot be subject to income arising therefrom either by usage or by disposal.

Top official sources in the FBR said that the tax machinery so far collected Rs290 billion on account of Super Tax in the first nine months of the current fiscal year, and it might go up to Rs315 billion by the end of June 2026.

In the extensive and detailed, almost 300-page judgement, the court critically examined several complex taxation issues.

The court held that the super tax levied under Section 4B (introduced by the Finance Act, 2015 for the rehabilitation of temporarily displaced persons from tax years 2015-2022)) and Section 4C (introduced by the Finance Act, 2022 imposed on ‘High Earning Persons’ from tax year 2022 and onwards) is a valid exercise of parliament’s taxing power under Entry 47 of the Federal Legislative List of the Constitution of Pakistan, being a tax on income.

In the case of section 4B, the court rejected the argument that the levy was a fee and not a tax, holding that the mere mention of a purpose did not automatically render the tax a fee in the absence of any direct service linkage to any beneficiary.

The court placed Section 4B squarely within the domain of taxation, validly passed through the Finance Act, thereby upholding all the high courts’ judgements to this effect.

In respect of Section 4C Super Tax, the court further held that the provision is a self-contained provision with its own charge, assessment, and payment mechanism; there is no constitutional bar on so-called “double taxation”.

Significantly, the court reaffirmed the doctrine of judicial restraint in fiscal matters, holding that the wisdom and policy of taxation lie with the legislature, and that judicial review is confined to questions of legislative competence, constitutional compliance, and absence of arbitrariness.

In another significant finding on the jurisdictional side, the court found the FBR and the Commissioner Inland Revenue (if properly authorised) to enjoy the powers of instituting and defending proceedings relating to tax matters arising from constitutional challenges.

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Pakistani Students’ UK Visa Delays Raised by Azam Nazeer Tarar with British High Commissioner

Azam Nazeer Tarar with UK High Commissioner

ISLAMABAD: British High Commissioner Jane Marriott called on Federal Minister for Law & Justice Senator Azam Nazeer Tarar. The meeting discussed Pakistan-UK bilateral relations, matters of mutual interest and ways to further strengthen cooperation between the two countries.

During the meeting, the Federal Minister raised the issue of delays in UK visas for Pakistani students and conveyed the Government of Pakistan’s concern to the British High Commissioner.

Senator Azam Nazeer Tarar said that hundreds of Pakistani students were facing difficulties due to delays in visa processing, with a risk that the delays could result in the loss of their academic year. He stressed the need to remove obstacles faced by Pakistani students seeking education abroad and facilitate them in this regard.

The Federal Minister briefed the British High Commissioner that, on the directives of the Prime Minister, a committee under his chairmanship was working to improve the legal and institutional framework concerning Pakistani students studying abroad.

He further informed the High Commissioner that, on the Prime Minister’s directives, the committee had finalized its recommendations on the matter, and work was underway to further improve the legal and institutional framework for Pakistani students pursuing education abroad.

The Federal Minister said that the legal and institutional framework for Pakistani students seeking education abroad was being improved to develop an effective mechanism for addressing the issues faced by students.

British High Commissioner Jane Marriott assured the Federal Minister that the issue of delays in visas for Pakistani students would be addressed.

The meeting also discussed further strengthening educational linkages between Pakistan and the United Kingdom, as well as enhancing institutional cooperation and engagement between the two countries.

Minister of State for Law, Justice and Human Rights Barrister Aqeel Malik was also present during the meeting.

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Naqvi Sets September 30 Deadline for Completion of Islamabad Safe City Expansion

ISLAMABAD: Interior Minister Mohsin Naqvi, accompanied by Minister of State for Interior Talal Chaudhry, visited the Islamabad Safe City Headquarters on Friday and chaired a special meeting to review progress on the Safe City Expansion Project, directing officials to complete the ambitious initiative by September 30.

During the briefing, officials informed the minister that overall work on the expansion project has reached 85 percent completion. Installation of the new surveillance network is also 85 percent complete, while 415 kilometres of optical fibre have been laid to support the upgraded system. Work on the data centre, cyber architecture, and cybersecurity infrastructure has also reached approximately 80 percent completion.

Expressing satisfaction over the pace of work, Naqvi stressed that the remaining tasks must be completed within the stipulated timeframe.

He said the government’s vision is to transform the Islamabad Safe City into a modern, smart, and world-class institution comparable to those in developed countries.

The interior minister said the technologically advanced Safe City system would significantly strengthen public safety through enhanced surveillance, effective monitoring, and rapid emergency response capabilities.

He noted that the project would play a vital role in improving law enforcement efficiency and ensuring better security for residents of the federal capital.

Naqvi also assigned officials the task of completing the state-of-the-art Fusion Centre within the next three months, describing it as a critical component of the upgraded Safe City network.

He further directed the relevant authorities to finalise the Safe City Bill at the earliest and present it before the National Assembly without delay to provide the legal framework necessary for the project’s long-term operation and expansion.

The meeting was attended by the Federal Secretary for Interior, the Director General of the Federal Investigation Agency (FIA), senior Safe City officials, and other relevant officers, who briefed the minister on the progress and future roadmap of the expansion project.

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PM Shehbaz, high-level delegation perform Umrah; pray for country’s progress

MAKKAH AL-MUKARRAMAH: Prime Minister Muhammad Shehbaz Sharif, along with his high-level delegation, performed Umrah here on Friday.

He was accompanied by his delegation including Deputy Prime Minister and Foreign Minister Senator Mohammad Ishaq Dar, Chief of Army Staff and Chief of Defence Forces Field Marshal Syed Asim Munir, federal ministers Khawaja Muhammad Asif and Attaullah Tarar, and Special Assistant to PM Tariq Fatemi.

The door of Khana Kaaba was opened specially for the prime minister and his delegation.

Following the completion of the Umrah rituals, the prime minister, field marshal, and other members of the Pakistani delegation offered special prayers for the progress and prosperity of the country, the safety and unity of the Muslim Ummah, and for regional and global peace.

The prime minister arrived in Jeddah on Thursday evening for a three-day visit to Saudi Arabia at the invitation of Saudi Crown Prince and Prime Minister Mohammed bin Salman bin Abdulaziz Al Saud.

Besides meeting with his Saudi counterpart, he will also pay a visit to the Roze-e-Rasool (PBUH) in Madinah.