PTBP Web Desk
The Federal Constitutional Court (FCC) is set to begin hearing a series of important petitions on December 1, challenging the controversial Super Tax imposed under Sections 4B and 4C of the Income Tax Ordinance, 2001. These hearings are expected to play a decisive role in shaping Pakistan’s future taxation framework, corporate liabilities, and the government’s fiscal strategy.
A three-judge bench headed by Chief Justice Amin-ud-Din Khan, and comprising Justice Syed Hasan Azhar Rizvi and Justice Arshad Hussain, will review appeals filed by the Federal Board of Revenue (FBR). These appeals challenge earlier judgments issued by the Sindh High Court, Lahore High Court, and Islamabad High Court, all of which addressed the legality and constitutionality of the Super Tax imposed on selected industries and high-income earners.
The Registrar’s Office of the Federal Constitutional Court has issued notices to all relevant parties, directing them to ensure personal appearance or representation on the scheduled hearing date. Stakeholders expect the proceedings to be closely followed by major industries, investors, policymakers, and legal experts, given the tax’s wide-reaching implications.
The transfer of these cases to the FCC marks a major development in what has been a long-standing legal and economic debate. Section 4B and Section 4C—both related to Super Tax—have remained subjects of challenge by corporations and high-income taxpayers across multiple industries.
Section 4B was first introduced through the Finance Act 2015 by the then-PML-N government. It imposed a one-time Super Tax on wealthy individuals, associations of persons (AOPs), and companies earning more than Rs500 million in tax year 2015. The tax rate was set at 4 percent for banking companies and 3 percent for all other categories. The stated purpose at the time was to generate funds for the rehabilitation of temporarily displaced persons as part of the 2015–16 Finance Bill.
Years later, Section 4C was added through the Finance Act 2022. The government argued that certain sectors had earned extraordinary profits—often referred to as “windfall gains”—despite economic instability. As a result, the Super Tax under Section 4C targeted 13 major sectors, raising their effective income tax rate to an unprecedented 39 percent. These sectors included banking, cement, iron and steel, sugar, oil and gas, fertilizers, LNG terminals, textiles, automobiles, beverages, cigarettes, chemicals, and airlines.
The tax applied to corporations earning more than Rs150 million in profits. According to official estimates at the time, the FBR expected to generate nearly Rs250 billion during fiscal year 2022–23 through this additional tax measure.
However, numerous corporations challenged the tax nationwide, filing petitions in the Sindh High Court, Lahore High Court, and Islamabad High Court. Their petitions argued that the Super Tax was arbitrary, discriminatory, and imposed without adequate economic justification. Many companies also claimed the tax created a disproportionate burden on productive industrial sectors, discouraging investment and undermining competitiveness.
The outcomes of these High Court cases varied, creating further complexity. This ultimately led to the Supreme Court transferring the matter to the Federal Constitutional Court under the new powers granted by the 27th Constitutional Amendment.
A five-member constitutional bench of the Supreme Court, also headed by Justice Amin-ud-Din Khan, had been reviewing the Super Tax appeals earlier. However, on October 24, 2025, the bench adjourned the matter until further notice. With the establishment of the FCC and its expanded jurisdiction, the case was formally reassigned for fresh hearings starting December 1.
In addition to the Super Tax hearings, the FCC has also scheduled a separate high-profile case involving the killing of journalist Arshad Sharif. A two-judge bench, comprising Justice Aamir Farooq and Justice Rozi Khan Barrech, will hear the matter on December 3.
Arshad Sharif was shot dead in Kenya on October 23, 2022, in what the Kenyan authorities labeled a “mistaken identity” incident. The case has since attracted significant national and international attention. Earlier, on August 29, 2025, the Islamabad High Court dismissed a petition filed by journalist Hamid Mir and Sharif’s widow, Javeria Siddique, seeking the formation of a judicial commission. The High Court ruled that the case was already under Suo Moto jurisdiction—now transferred to the FCC following the 27th Constitutional Amendment.
The FCC’s decisions on both matters—the Super Tax and the Sharif case—are expected to have long-term implications. The Super Tax hearings will shape the future of taxation policy, business confidence, and investor sentiment. Meanwhile, the Arshad Sharif case concerns broader issues of justice, media freedom, and state accountability.
For additional background on tax laws, readers may refer to the Income Tax Ordinance documentation (internal link suggestion). For updates on related policy matters, relevant information may also be found through the Ministry of Finance (external link suggestion).
