Taxation measures taken by the FBR in Pakistan have caused quite a stir among taxpayers, with many taking to the courts to challenge the imposition of super tax, CVT on foreign assets, and tax on deemed income basis. According to sources, taxpayers have paid a staggering amount of Rs2.5 billion to Rs3 billion as fees to lawyers, tax advisers, and consultants for fighting their cases against the FBR.
The CVT on foreign assets was due by December 15, 2022, while the tax on deemed income basis was due by December 31, 2022. The FBR imposed the super tax on the profits of wealthy corporations whose earnings exceeded Rs150 million through the Finance Act, 2022. The government had inserted Section 4C in the Income Tax Ordinance to charge the super tax from 13 specific sectors, including banks, cement, iron and steel, sugar, oil and gas, fertilizers, LNG terminals, textile, automobile, cigarettes, beverages, chemicals, and airlines.
The Supreme Court had directed high-income earners to pay 50% of the due liability with regard to the super tax. However, this taxation measure has faced legal challenges from taxpayers who argue that the Parliament has no legislative competence to levy such a tax on foreign assets. Similarly, the SHC had already dismissed petitions challenging the levy of tax on foreign assets of a resident individual as defined in Section 8(13) (c) of the Finance Act, 2022.
Despite the legal challenges, the FBR estimates that around 6,000 petitions have been filed in different courts against these taxation measures. The FBR is also verifying the payments of such huge amounts of fees from different sources.
In conclusion, taxation measures taken by the FBR in Pakistan have caused quite a stir among taxpayers, resulting in legal challenges and huge amounts of fees paid to lawyers, tax advisers, and consultants. While some of these measures have faced legal challenges and been dismissed by courts, others are still being debated. It remains to be seen what impact these measures will have on the economy and taxpayers in the long run.
Overall, it is crucial for taxpayers in Pakistan to stay informed about these taxation measures and seek legal guidance if necessary to ensure compliance with the law.
Note: This article is for informational purposes only and should not be construed as legal advice. Readers should seek professional guidance from legal experts for specific cases.