The Federal Constitutional Court (FCC) on Tuesday upheld the super tax imposed under Sections 4B and 4C of the Income Tax Ordinance, 2001, declaring it fully in line with the Constitution. The ruling reinforces Parliament’s exclusive authority to determine taxation policy and draws clear limits on judicial intervention in fiscal matters.
A three-member bench headed by Chief Justice Amin-ud-Din Khan, along with Justice Syed Hasan Azhar Rizvi and Justice Arshad Hussain Shah, announced the short order after reserving judgment earlier in the day. The court set aside earlier High Court rulings that had struck down or diluted Section 4C, holding that those decisions amounted to judicial overreach and violated the principle of separation of powers.
In its order, the FCC emphasized that courts cannot rework tax slabs, rates, thresholds, or broader fiscal policy. Their role, the court said, is confined to interpreting the law, not reshaping it. All appeals filed by the federal government, the Federal Board of Revenue (FBR), and tax authorities were declared maintainable.
The court also rejected taxpayers’ appeals related to Section 4B, ruling that it applies from 2015, while Section 4C applies from 2022, when each provision was enacted. According to the FBR, the decision is expected to generate around Rs300 billion in revenue.
The super tax targets high-income individuals and profitable sectors, including banking, cement, oil and gas, fertilisers, textiles, and airlines, and was introduced to help cushion the impact of inflation on vulnerable segments of society.
