ByIslamabad, Pakistan – The Supreme Court of Pakistan has reserved judgment on a case involving the Federal Board of Revenue (FBR) and textile companies challenging the government’s decision to retrospectively remove a 10% tax credit promised for investments made between July 1, 2018, and June 30, 2019.
The FBR had introduced the tax credit through the Finance Act, 2010, but later reduced it to 5% in the Finance Act, 2019. Several textile companies challenged this change, arguing that it violated their vested rights. Business Recorder
The Sindh High Court ruled in favor of the textile companies, finding that the government’s actions were unfair and violated the companies’ rights. The FBR then appealed the decision to the Supreme Court.
During the hearing, the FBR argued that the government has the right to modify tax laws at any time. However, the textile companies’ lawyer contended that the government’s actions were unfair and could discourage future investments.
The Supreme Court’s decision will have significant implications for the tax treatment of investments made during this period and could impact the government’s ability to attract future investments.
