Islamabad: The Supreme Court of Pakistan Monday modified an impugned order of the Lahore High Court (LHC) and directed wealthy taxpayers to deposit 50% of due “super tax” directly with the Federal Board of Revenue (FBR) within one week.
Headed by Chief Justice of Pakistan Umar Ata Bandial, a three-member bench of the Supreme Court took up a plea filed by the FBR against the impugned interim order of the LHC, which had stayed the recovery proceedings from high-earning taxpayers.
In July last year, the federal government, under the leadership of Prime Minister Shehbaz Sharif, and Miftah Ismail as the economic czar, announced the imposition of a “super tax” of 10% on large-scale industries to relieve the poor from the burden of additional taxation.
Taxpayers had challenged the imposition of the super tax with retrospective effect for the tax year 2022 and onward before the LHC.
The LHC had stayed the recovery proceeding and directed FBR to allow different industries to file their returns, excluding the super tax subject to the deposit of post-dated cheques of the differential amount.
It was further said that the cheques would be encashed at the direction of the court or subject to the final decision of the case.
However, the LHC order of Sept 29, 2022, was challenged in the Supreme Court by FBR through a lawyer Ms Asma Hamid.
In the wake of the Supreme Court order, the FBR now expects a sizable revenue collection to bridge the shortfall in the coming months.
FBR exceeds revenue target by Rs4 billion in January; collects Rs537 billion
The Federal Board of Revenue (FBR) demonstrated a “commendable revenue collection performance” in January 2023 and exceeded the monthly revenue target of Rs533 billion by Rs4 billion.
According to provisional figures, FBR showed impressive revenue growth of 23% in January 2023 on a year-on-year basis by collecting Rs537 billion.
A statement said that the bureau collected Rs3.965 trillion in the first seven months (July – January) of FY23 against Rs3.367 trillion collected in the corresponding period of last year, depicting a growth of 18%.
FBR collects Rs3.43 trillion in six months of FY23; 17% increase YoY
It hoped that FBR was “committed” to meeting the annual budgetary target of Rs7.47 trillion for the current financial year despite economic challenges.
The statement said that during the first seven months of FY23, direct taxes collection grew at a “robust pace”, showing growth of 48%. It said that the expansion in direct taxes collection was “reflective of government’s policy of shifting the tax burden to wealthy and affluent segments of society”.
During the period under review, the growth in domestic taxes was 40% on a YoY basis. The contribution of domestic taxes has also increased from 50% last year to 59% during FY23.
Additionally, FBR did not stop short of taking care of exporters’ liquidity problems and issued refunds of Rs208 billion during the first seven months of this fiscal year as against Rs183 billion during the corresponding period of last year, which is 14 % more than the previous year’s issued refunds.