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ISLAMABAD, May 5 (APP):Advocate Raza Rabbani, Counsel for the Federal Board of Revenue (FBR), has said Super Tax was imposed after all required legislations and that all proceeds are directed to the federal consolidated budget.
Raza Rabbani, former Chairman Senate and Counsel for the FBR in Constitutional Appeals against imposition of the Super Tax was presenting his arguments before the five member Constitutional Bench of the Supreme Court headed by Justice Amin ud Din Khan.
He stated that the Super Tax was intended for the reconstruction of damaged homes, emphasizing that it is distinct from income tax and not limited to a specific region.
Justice Jamal Mandokhail inquired whether the tax had been imposed under Article 173 of the Constitution. In response, Rabbani explained that Article 173 clearly outlines the taxation mechanism, stating that the Standing Committee on Finance first reviews budget proposals, which are then forwarded to the upper house for approval.
Rabbani further clarified that Article 4B, referenced in the matter, is not for local purposes but pertains to local bodies. “It explicitly states that the Super Tax is to be used for the rehabilitation of destroyed houses. This does not designate a specific area,” he said.
He reiterated that income tax and Super Tax are two separate entities, with the latter being imposed for a specific objective.
Justice Mandokhail questioned how the revenue collected through the Super Tax is allocated and whether such a tax could be imposed without proper legislation. In response, Rabbani affirmed that legislation was enacted for the Super Tax and that all proceeds are directed to the federal consolidated budget.
Justice Mandokhail reminded the court that the utilization of the federal consolidated fund is governed by Article 175 of the Constitution. Rabbani referred to the preamble of the 2016 Super Tax legislation, which states that all collected funds must first be deposited into the federal consolidated fund.
The Supreme Court adjourned the hearing until the following day, with FBR’s legal counsel expected to continue his arguments.