ISLAMABAD – Supreme Court of Pakistan has issued an interim order, allowing taxpayers to pay only 50 percent of the deemed income tax till the appeal is pending final adjudication.
A bench led by Chief Justice of Pakistan Umar Ata Bandial granted interim relief against the 20 percent deemed income tax on real estate.
In the second hearing of the appeal, the apex court directed the Federal Board of Revenue to expand its tax base rather than imposing more taxes on compliant taxpayers.
Judge Ayesha Malik remarked that the apex tax collection authority should push affluent taxpayers to grow and as a result of growth, tax collection will boost; she mentioned observing that FBR is milking the same taxpayers who already bear the brunt.
The petitioners grilled the tax authority about the constitutional mandate to impose taxes in an area that was within the provincial domain.
Meanwhile, FBR officials maintained that the effective tax rate is a mere 1pc, as the government aimed at garnering additional revenue of Rs15 billion.
In 2022, taxpayers moved to Lahore High Court (LHC) and a notice was issued to the Attorney General of Pakistan as petitioner questioned the Constitutionality of tax on deemed income.
Let it be known that the federal government has set an annual tax collection target of Rs7.6 trillion for the top tax authority. New taxes were sought as FBR got the target of Rs5.43 trillion, but managed to get Rs4.87 trillion till last week.
Amid the economic meltdown, global lender IMF also pushed Islamabad to take additional revenue measures.
