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CJP says Pakistan “not going bankrupt”

On Friday, Chief Justice of Pakistan (CJP) Umar Ata Bandial dismissed the idea that the nation was on the verge of bankruptcy and urged the government to take action to stop cash smuggling.

A hearing into the Federal Board of Revenue’s (FBR) petition to the Lahore High Court’s ban on the taxman attempting to collect a “super tax” from industries was resumed by a three-member panel led by Justice Bandial.

To lessen the impact of growing inflation on the underprivileged, the government announced intentions to impose a one-time 10% tax on the profits of large enterprises in June of last year. The FBR estimated that the super tax will generate Rs250 billion in revenue in FY23.

The government implemented a super tax on those with high incomes through the Finance Act 2022 by adding a new section, 4C, to the income tax ordinance. 13 industries earning more than Rs150 million would be subject to a 10 percent super tax through this section beginning in the tax year 2022.

After several businesses filed lawsuits against the super tax with the Lahore High Court (LHC), the LHC put a stop to the FBR’s ability to collect it. In response, the FBR filed an SC appeal against the LHC’s decision.

The LHC’s interim ruling was changed by the highest court during the most recent hearing on February 6 and affluent individuals were instructed to pay half of their super tax obligations directly to the FBR within a week.

The top court today sought to combine all cases involving the super tax so they could be heard concurrently.

FBR attorney Faisal Siddiqui informed the court at the beginning of the hearing that the LHC had deferred the application of its final judgment to the matter for a period of 60 days. The firm’s attorney, Farogh Naseem, stated that with the announcement of the provincial court’s final ruling, all applications filed by the FBR against the LHC’s interim order had lost their validity.

The case may be scheduled for a hearing the following week, the chief justice suggested. He said that the extra tax was applied by the FBR “in good faith.” According to CJP Bandial, it was also well known that Shell Pakistan, one of the petitioners, paid millions of rupees worth of taxes.

Siddiqui replied, “Right now I am representing the FBR. If the nation went into default, he declared he would also stand in for the federal government. He was cut off by the chief justice, who assured him that the nation was “not going bankrupt.” He continued, “Everyone ought to better oneself for the good of the nation.

The judge postponed the hearing until February 16 after making the orders.

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