Super tax case: Rs114bn collected in terms of Sec 4B of IT Ord, FCC told

ISLAMABAD: The Federal Constitutional Court was informed that Rs114 billion were collected in terms of Section 4B of the Income Tax Ordinance, while the federation spent Rs117 billion, from its sources, on the rehabilitation of the temporarily displaced persons (TDPs).

Dr Shah Nawaz, appearing on behalf of the Federal Board of Revenue (FBR), said that the estimated total cost of rehabilitation of TDPs was Rs80 billion, which was approved by the Parliament, adding that Rs 114 billion were collected from 2015 to 2020.

A three-judge bench of the FCC, headed by Justice Amin-ud-Din Khan and comprising Justice Syed Hasan Azhar Rizvi and Justice Arshad Hussain, on Monday heard the FBR appeals against the judgments of the Sindh, Lahore, and Islamabad High Courts regarding the levy of Super Tax through Section 4B, inserted in the Income Tax Ordinance, 2001, through the Finance Act 2015.

READ MORE: Sections 4B & 4C of IT Ord: FCC set to take up super tax cases from 5th

The counsels of taxpayers – Imtiaz Siddiqui and Makhdoom Ali Khan, and the FBR lawyers Asma Hamid, Dr Shah Nawaz, concluded their arguments on Section 4B of the ITO, and from today (Tuesday), the petitioners and the FBR counsels would present their arguments on Sec 4C of the ITO

Imtiaz Siddiqui, representing taxpayers from Lahore, argued that the Courts should protect the rights of taxpayers, adding that there must be some check on taxes collected, as the department has collected huge amounts in the name of Super Tax. He said the tax under Section 4B of the ITO was collected for a specific purpose.

Makhdoom, appearing on behalf of Sindh taxpayers, contended that the FBR can’t collect more tax than the estimated amount, i.e.,Rs80 billion, and the legislature had confined this tax for the rehabilitation of TDPs.

He said the Super Tax was imposed in addition to the tax collected on income, adding that the Constitutional Bench of the Supreme Court, while hearing the Super Tax in May 2025, had ordered the FBR to inform how much was collected and spent, but the FBR has not complied with its order.

He informed that during the budget speech 2015-16, the then Finance Minister made a solemn statement before the Parliament that this (Super Tax) would be a one-time tax and it would be for a specific purpose.

Dr Shah Nawaz argued that Section 4B is also a compulsory exaction of money by public authorities. It is collected in the Federal Consolidated Fund, and as such, it forms part of public revenue. There is no element of quid pro quo, and as such, it is not a fee. Thus, 4B is a tax for all intents and purposes.

He stated that the Super Tax is not a fee because there is no element of quid pro quo. It is received from Banks @4% of the income and from other persons having income equal to or exceeding Rs.500 million @3% of the income. No services are to be provided to those persons who pay Super Tax. As such, it comes out of the ambit of “fees”.

Dr Shah Nawaz argued that during the course of arguments, the department produced evidence showing that the Super Tax is received in the Federal Consolidated Fund. As such, all the arguments that it is not a “tax” fall flat on this point only.

He said that in some petitions, it has been argued that its income falls within the ambit of the Final Tax Regime under Section 4 read with Section 8 and Section 169 of the Income Tax Ordinance, 2001, therefore, whatever tax paid is full and final discharge of the tax liability and consequently no further tax including Super Tax can be demanded from the petitioner.

Copyright Business Recorder, 2026