•The government only collects super taxes for its own “financial space”, lawyers believe
•Say that states can be ready to keep their spending consistent with constitutional and legal provisions
Islamabad: Oppose Super taxSenior legal counsel Ahmed Jamal Sukhera told the Supreme Court’s Constitutional Judge (CB) on Monday that the Constitution does not allow arbitrary litigation, including the law.
Under Justice Aminuddin Khan, the CB heard several challenges raised by different taxpayers who questioned the constitutional virus of Article 4C (ITO) of the Income Tax Ordinance, implemented in 2001 in the 2023 tax year.
On behalf of Fauji Fertilizer, Mr. Sukhera believes that the tax was imposed by the federal government to raise Rs 20,000 crore simply because it is seeking financial space.
In the last year, the government collected Rs 35,000 crore through business tax, even on matches. According to the policy statement, he claimed the measure pushed some people below the poverty line.
So this year, the government taxes high-income people on the grounds of their unexpected profits and believes that the solution to the fiscal space is to impose a super tax on them.
Lawyers pointed out that only two factors were considered when levied on the super tax: First, the sales tax of Rs 215 crore last year had an inflationary impact; second, those with high incomes earned unexpected profits that could be taxed to raise Rs 215 crore.
Advisory aid says no other factors are considered, according to the policy statement submitted by the government in its complaint, adding that according to the Cabinet and the World Bank, fiscal space up to 1.7tr can be formulated annually through a consistent constitutional and legal provision for federal spending.
The lawyer listed seven examples. He said businesses open across the state are between Rs 600 and Rs 800 crore per year, so the required Rs 2000 crore can be increased by reducing these losses.
Second, the federal government continues to spend on subjects in provinces under the 18th Amendment, which is inconsistent with the Constitution. According to a report from the World Bank, it could save Rs 32,800 crore in this way. In addition, according to the same report, a single account of the Ministry of Finance can save another Rs 40,040 crore.
The fourth example he gave is that power theft and related losses are Rs 6,000 crore per year, according to federal government data. Reducing this loss by Rs 20,000 crore could save high-income taxpayers from super taxes.
Fifth, under the Fiscal Liability and Debt Restrictions Act (FDRLA) of 2005, the federal fiscal deficit should not exceed 3.5% of GDP, and the debt-to-GDP ratio should not exceed 60%. Both restrictions have been undermined since 2016.
In the absence of compliance, the FRDLA requires the federal government to take corrective measures, including cutting spending from federal consolidated funds to debt relief paths over two fiscal years.
This means that if the debt-to-GDP ratio is not maintained within the prescribed limits, the government must cut its expenses. However, the government no longer does this and continues to borrow, and the interest payments incurred (violating statutory requirements) are transferred to existing taxpayers by increasing taxes or collecting new taxes.
Mr. Sukhara argued that the government is constitutionally and legally using public funds as trustees and trustees of the people of Pakistan for the best interests. He stressed that public funds cannot be washed year after year without responsibility. He further argued that it was time for the government to be forced to cut costs so that existing taxpayers would not bear additional taxes at their own fault.
Posted in Dawn on September 23, 2025
