The Chief Justice of Pakistan has stated that the country “is not going bankrupt,” and that the situation may be improved by cracking down on the smuggling of foreign currency.
ISLAMABAD: On Friday, Pakistan’s Chief Justice Umar Ata Bandial dismissed the idea that the nation was in danger of “bankruptcy” and urged the government to make concerted steps to halt the flow of foreign currency through smuggling.
During the hearing of the Federal Board of Revenue’s (FBR) petition challenging the Lahore High Court’s order regarding the collection of “super tax” from large-scale industries, the chief justice presided over a three-member bench that also included Justice Ayesha A Malik and Justice Athar Minallah.
The FBR forecasted that the super tax would be implemented in FY23 and generate Rs250 billion. Taxpayers, however, challenged the tax in the LHC with a retroactive impact beginning with the tax year 2022.
The court ordered the FBR to permit various industries to file their returns without include the super tax, subject to the submission of post-dated checks for the differential amount. The court also ordered the stay of the recovery procedure.
The LHC order from September 29, 2022, was contested by the FBR at the Supreme Court, nevertheless.
The Supreme Court merged all identical petitions against the super tax during Friday’s proceedings and scheduled hearings for next week.
According to Faisal Siddiqui, counsel for the FBR, the LHC has put a 60-day hold on the case’s final judgment’s implementation. He continued, “There are customs in tax cases where the court directs firms to pay 50% of the tax.”
The Lahore High Court’s final verdict rendered all applications filed by the FBR challenging the interim order of the LHC futile, according to Barrister Farogh Naseem, counsel for the industries.
After the petitions lose their validity, the court could not impose the payment of a 50% super tax, he continued.
The FBR had good reason for imposing the super tax, the chief judge said, adding that it was also known that one of the petitioners, Shell Pakistan, paid taxes in the millions of rupees.
Advocate Siddiqui stated that he was speaking on behalf of the FBR and added that, in the event of a default, he would also speak on behalf of the federal government.
The chief justice responded by stating that the nation was not in financial trouble. He continued, “Everyone ought to better oneself for the good of the nation.
He stated that every day, $4 million were being unlawfully transported out of Pakistan.
All we need to do is organise ourselves and start acting, he continued.
He continued by saying that if the government took action to limit the export of foreign cash, the situation might become better.
The case hearing was later postponed until February 16.
The government imposed a super tax on those with high incomes through the Finance Act 2022 by adding a new Section 4C to the Income Tax Ordinance.
The FBR imposed a 10% super tax through this section on 13 industries with revenue of more than Rs150 million in the tax year 2022.
Steel, banking, cement, tobacco, chemicals, alcohol, liquefied natural gas terminals, textile, auto, sugar refineries, oil and gas, and fertiliser are among the industries.
Since then, the verdict has been contested on various grounds in practically all of the nation’s high courts.
