Federal Constitutional Court upholds super tax, clears way for Rs300 billion revenue

The Federal Constitutional Court has upheld the imposition of the super tax, declaring it constitutionally valid and dismissing appeals filed by taxpayers against the levy, the Federal Board of Revenue (FBR) said on Tuesday.

According to the FBR, the court rejected challenges filed under Section 4B of the Income Tax Ordinance, ruling that the provision constitutes a lawful tax measure. The decision is expected to generate approximately Rs300 billion in revenue for the national exchequer.

Prominent tax lawyer Asma Hameed represented the FBR during the proceedings and presented arguments in support of the super tax before the court.

In its ruling, the court also clarified that the super tax rate under Section 4C for the tax year 2022 will be 10 percent. Additionally, it ordered the issuance of fresh notices to petroleum companies engaged in oil and gas exploration, indicating further scrutiny of the sector under the tax regime.

The court further ruled that the super tax on banking companies will apply for the tax year 2023 and subsequent years, providing clarity on the levy’s future applicability.

The verdict marks a significant legal victory for the government and the FBR, strengthening the state’s position in enforcing extraordinary tax measures aimed at boosting revenue amid fiscal challenges.