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Even otherwise, the above laws could not override the National Accountability Bureau Ordinance, 1999 (NAB Ordinance)that applies from January 1, 1985, being special law overrides any such laws as held by Supreme Court of Pakistan in Amjad Qadoos v Chairman Accountability Bureau (NAB) Islamabad & Others 2014 SCMR 1567 as under:

In our opinion the answer to this controversy would be to determine whether or not any of the statutes is a special statute which would then either prevail over the other one or if both are special statutes then what would be the situation. In this regard reference can be made to the case of Messrs Elahi Cotton Mills Ltd. and others (supra) in which it has been held in no uncertain terms that the Income Tax Ordinance is a general statute qua the Economic Reforms Ordinance, 1992 and hence the provisions of the latter would prevail. Similarly, it was held in the case of Khan Asfandyar Wali and others (supra) that the National Accountability Ordinance (NAO) was a special statute and hence would prevail over the general laws although at the same time certain provisions thereof were struck down and certain recommendations were made to the Federal Government to amend the same. Finally, in the case of I. G. HQFrontier Corps and Others (supra) it has been held that a special law would prevail over a general law although it has been enacted after the said general law. In view of the foregoing discussion we have no hesitation in holding that the NAO is a special law and hence would prevail over the provisions of the Income Tax Ordinance being the general law”.

The PML-N, which was ending its tenure on May 31, 2018, was very keen to pass these amnesties when only 15 days were left for leaving the government for the next one. Through 82,889 declarations both these schemes fetched only Rs 124 billion (domestic Rs 77 billion and foreign Rs 47 billion), though the then Adviser to Prime Minister on Revenue, Haroon Akhtar, claimed that collection would not be less than US$ 5 billion for foreign assets alone. In the Finance Act, 2019, the PTI government also passed the Asset Declaration Act, 2019, earlier promulgated on May 15, 2019 as Asset Declaration Ordinance, 2019. It followed the same definition of “public officeholders” as by-laws passed unconstitutionally passed by National Assembly under the PML-N government.

The PTI scheme was for undisclosed assets, held in Pakistan and abroad, acquired up to the 30th June, 2018 or expenditure incurred or benami assets held, or undisclosed sales. The date of compliance was June 30, 2019. About 56 people, whose data was shared under Tax Information Exchange Agreements (TIEAs) of Organisation for Economic Co-operation and Development (OECD), availed the PTI’s tax amnesty scheme and declared Rs 31.8 billion worth of assets. They paid only Rs 1.7 billion and got a relief of Rs 20.6 billion. The returns received and amount paid under this scheme must also be appearing in Tax Directory Analysis for Tax Year 2018 as it claims the deadline is September 14, 2020 of all returns received for tax year 2018.

The PTI government must tell the nation whether any public officeholder availed the benefit of the above laws and whether their names were included in ‘Parliamentarians’ Tax Directory for Tax Year 2018’ and ‘Tax Directory of all Taxpayers for Tax Year 2018 or not. The NAB must also seek this information to assure nobody escapes punishment under the NAO.

Besides above, another possible reason for PTI government not to publish tax directories for tax year 2019 and 2020 is to hide its failure on revenue front. The target assigned to FBR for fiscal year 2018-19 was Rs 4435 billion, which was revised downwards twice (first to Rs 4398 billion and then to Rs 4150 billion). According to FBR Year Book 2018-19, FBR collected Rs 3828.5 billion that was “0.4% lesser than the collection of previous fiscal year”. This pushed the fiscal deficit to record 8.9% of GDP (Rs 3.45 trillion). For fiscal year 2019-20, it was reduced to 8.1% of GDP (Rs 3.37 trillion) by blocking refunds of Rs 710 billion. The PTI government during its first two years in power incurred tax expenditure cost of Rs 2.12 trillion (Analysing ‘tax expenditure’, Business Recorder, June 26, 2020).

The PTI government also published ‘Parliamentarians Tax Directory for the year ending 30 June 2017’ and ‘Tax Directory for the year ending 30 June 2017’ as late as on February 22, 2019, (these were tabulated from returns filed manually and electronically till February 21, 2019 for tax year 2017). The PTI government could have released directories for tax year 2017 and 2018 simultaneously, but it delayed tax directories for 2018 till September 18, 2020 to show “impressive” performance by taking into account the returns filed up to September 14, 2020 for tax year 2018. It is now understandable as to why the PTI government is not publishing tax directories for tax years 2019 and 2020, which are long overdue.

Another reason may be the meagre income tax received from the total number of income tax filers for tax year 2020 till April 8, 2021. Only 2,81,6694 paid Rs 50.5 billion as per details below:

• Individuals: 2,648,709: tax= Rs 25 billion

• Association of Persons (AOP): 72,048: tax= Rs 4 billion

• Companies: 54,140: tax= Rs 21.3 billion

• 41,743 filed returns manually and paid Rs 15 million

• The number of “active” income tax return filers as per Active Taxpayers List (ATL) on FBR’s website (data updated every Monday), was 2,573,093 as on the latest date (April 19, 2021) increase of 66,354 since April 8, 2021.

• According to FBR many filed returns late but did not pay default surcharge to be eligible to appear in ATL.

FBR has not disclosed the numbers in the above manner in its latest Year Book: 2019-20 or thereafter in any quarterly statement or its website. According to the latest data available on the website of Pakistan Telecommunication Authority (PTA), the total number of cellular subscribers as on January 31, 2021 was 180 million (84% teledensity), out of which 95 million were 3G/4G subscribers (44.5% penetration), 2 million basic telephony users (1.3 teledensity) and 98 million broadband subscribers (45.6% penetration). FBR should determine income tax base from the data of about 100 million unique mobile users (many have more than one numbers) using details of their calling patterns, bills, handset ownership status, assets, travel abroad, payment of utility bills, fees for children etc. All of them are paying advance adjustable income tax of 12.5%.Those not chargeable to income tax under the law, cannot be subjected to advance tax as held by Lahore High Court in the Union Bank Ltd. v Federation of Pakistan (1998) 77 TAX 125 (H.C. Lah.) and Lone Cold Storage, Lahore v Revenue officers, Lahore Electric Power Co., and others (2011) 103 TAX 5 (H.C. Lah.).

The newly-appointed Finance & Revenue Minister, Shaukat Fayaz Ahmad Tarin, and Prime Minister Imran Khan must take note of extreme injustice inflicted on millions by payment of advance income tax when they are not chargeable to tax. The Supreme Court of Pakistan held in the Commissioner of Income Tax, Lahore and others v Messrs Prosperity Weaving Mills (Pvt.) Ltd and others 2011 PTD 159 (S.C. Pak.) that if a person is not taxable, advance tax cannot be collected as well and this is binding under Article 189 of the Constitution. In the existing extreme hardship days, especially after the third deadly wave of Covid-19 endemic, advance income tax on mobile and internet use from those having no income or below taxable limit or exempt, must be waived and amounts already collected for all previous years should be refunded immediately without filing of returns using the same data portal as for Ehsaas Emergency Cash Programme.


(The writers, lawyers and partners of Huzaima, Ikram & Ijaz, are Adjunct Faculty at Lahore University of Management Sciences)

Copyright Business Recorder, 2021

Dr Ikramul Haq

The writer is a lawyer and author of many books, and Adjunct Faculty at Lahore University of management Sciences (LUMS) as well as member of Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE). He can be reached at [email protected]

Huzaima Bukhari

The writer is a lawyer and author of many books, and Adjunct Faculty at Lahore University of management Sciences (LUMS), member of Advisory Board and Visiting Senior Fellow of Pakistan Institute of Development Economics (PIDE). She can be reached at [email protected]


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