MTC Represents Dozens Of Taxpayers In Challenge To Super Tax

The Firm is representing a number of taxpayers who have challenged the imposition of Super Tax on high earning persons under Section 4C of the Income Tax Ordinance, 2001. Under the law, the rate of Super Tax is such that where the income (i) does not exceed PKR 150 million, the rate of Super Tax is 0% of the income; (ii) exceeds PKR 150 million but does not exceed PKR 200 million, the rate of Super Tax is 1% of the income; (iii) exceeds PKR 200 million but does not exceed PKR 250 million, the rate of Super Tax is 2% of the income; (iv) exceeds PKR 250 million but does not exceed PKR 300 million, the rate of Super Tax is 3% of the income; and (v) exceeds PKR 300 million, the rate of Super Tax is 4% of the income.

The key arguments are that the law is violative of the Constitution of Islamic Republic of Pakistan, 1973 because there is already a provision in the 2001 Ordinance which imposes Super Tax. The new provision, therefore, amounts to double taxation. Further, the tax has been imposed with retrospective effect which has violated the vested rights of the taxpayers.

We have represented such clients before the High Court of Sindh at Karachi and were able to obtain a favourable judgment, whereby, it was held that Super Tax on high earning persons cannot be imposed retrospective. The Government has filed an appeal and the matter is currently pending before the Supreme Court of Pakistan. MTC’s team includes Arshad Tayebaly, Senior Partner, Omer Memon, Partner, and Aitzaz Manzoor Memon, Senior Associate.